TTOG11730 - Civil Investigation of Fraud (Code 9): historical record: managing the disclosure process: action at the opening meeting when no disclosure is indicated in response to formal questions

Where no disclosure is made in response to the CIF statement, you should give the taxpayer every opportunity to reconsider.

In some cases the taxpayer will refuse to co-operate or, even if he or she claims to be co-operating, decline to answer any factual questions. Where this happens the Investigator should request immediate access to business and private records. If this is declined the taxpayer may be told that where appropriate use of statutory powers will be made.

Where no formal response has been made under CIF the taxpayer should be allowed every reasonable opportunity to re-consider the position - say 10 working days - to reflect and take further advice. If during that time a response to the formal questions is received which amounts to a denial or if no response is forthcoming then write to the taxpayer (copy to the adviser) to state that as it appears the taxpayer does not wish to make a disclosure in the time allowed, HMRC will now investigate.

Where co-operation has been offered it will normally be appropriate to request the business records. If there is not co-operation, or if the request is refused, the use of formal powers to obtain the records will have to be considered.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

It is inappropriate to invite a Disclosure Report to be commissioned where a taxpayer has made no disclosure in response to the CIF Statement.

Sometimes advisers will say that even though nothing is being disclosed by their client they would still like to take the opportunity to check that nothing needs to be disclosed. They can do so if they wish (but the Investigator must not encourage or approve such action). However, if there is no disclosure in response to CIF, HMRC’s investigation must proceed. The taxpayer has been given the opportunity to make a disclosure and if that is not taken up then there can be no assurance that any belated disclosure will be accepted, as a disclosure in response to the CIF Statement.

Under direct taxes, in non-disclosure cases it will be necessary to request statements of assets and bank accounts operated. Where co-operation is being provided the assistance of the adviser in arranging the production of the statements is to be welcomed. Thought should be given by the Investigator to what other statements and schedules can properly be requested of the taxpayer. Mandates should be requested. In a non-disclosure case the mandates will be taken up promptly, so they should, where co-operation is being provided, be completed at the opening meeting.

Usually it is possible to continue with the meeting when no disclosure has been made. The questions addressed to the taxpayer on his/her business and private affairs become particularly important. The general nature of the questions will follow the same pattern as outlined for disclosure cases though the questioning should be adapted to the circumstances of the case and to the fact that a disclosure is not being made.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)