What does the Facility involve?
Click to understand each stage
Opening meeting
If no response is received by HMRC within the 60-day period, this will be treated as lack of co-operation and/or a conscious decision to deny fraud. HMRC will then conduct its own investigation using formal powers, meaning ignoring the Contractual Disclosure Facility letter puts you at risk of being prosecuted.
If you wish to accept the CDF offer, your outline disclosure must be completed and submitted within 60 days.
This outline is not expected to contain precise details about the tax that has been understated. Your outline disclosure needs to set out sufficient information to identify:
If possible, an early payment on account to cover any amount(s) identified should also be submitted alongside your outline disclosure to help demonstrate your engagement with the CDF process and to reduce the late payment interest that is accruing.
HMRC will review the formal Contractual Disclosure Facility report and raise any questions or concerns with us (if applicable). We will then work with you to resolve any final points and make any adjustments, if necessary.
HMRC may request a final settlement meeting with you to discuss the report and make sure you are satisfied it contains everything it needs to.
Once HMRC is satisfied all irregularities have been resolved, two further documents will need to be completed and signed:
Finalisation
Outline disclosure and the CDF contract
HMRC will ask you to attend an opening meeting to learn more about your personal, business and financial affairs, as well as questioning you about your outline disclosure.
You should always be accompanied at any meeting by a specialist advisor.
In preparation for the opening meeting, our specialist team can help you understand what to expect by running through sample questions.
Scoping meeting
This is a discussion between HMRC and your advisor to agree the scope of the formal disclosure report so it is clear on both sides what work needs to be done.
This is an opportunity for us to seek to reduce the amount of work that needs to be done, for example, by agreeing to review your financial statements for a sample period of time to identify issues rather than analyse information covering up to 20 years.
Timescales for the work and submission of the formal report will be discussed at the scoping meeting, with both sides agreeing to work towards a set date in the future.
Formal disclosure report
After the initial formalities above have been completed, HMRC will take a back seat and allow your advisor to work with you to produce a detailed financial report.
HMRC will expect to be kept informed of progress at regular intervals, which may involve regular meetings between us and HMRC.
The 60 days allowed to do all of this is relatively short period, so it is advisable to seek specialist help very quickly at the outset.
You will initially have 60 days to either agree to the facility’s terms and provide an ‘outline disclosure’ or deny any tax fraud has been committed.
letter of offer – this will offer a sum in full and final settlement of the historic tax, interest and penalty that is due. If HMRC accepts your offer, it forms a binding contract between you and HMRC and closes off the past.
certificate of full disclosure – this is a final statement that, to the best of your knowledge and belief, you have made a full disclosure. If this certificate is signed dishonestly, HMRC reserves the right to prosecute if it later finds out about other issues.
what you did and over what period
how you did it
the involvement and identity of other people and entities involved
how you benefited from the deliberate conduct
an estimate of the amount of tax underpaid
a summary of any non-deliberate inaccuracies.
If no response is received by HMRC within the 60-day period, this will be treated as lack of co-operation and/or a conscious decision to deny fraud. HMRC will then conduct its own investigation using formal powers, meaning ignoring the Contractual Disclosure Facility letter puts you at risk of being prosecuted.
If you wish to accept the CDF offer, your outline disclosure must be completed and submitted within 60 days.
This outline is not expected to contain precise details about the tax that has been understated. Your outline disclosure needs to set out sufficient information to identify:
If possible, an early payment on account to cover any amount(s) identified should also be submitted alongside your outline disclosure to help demonstrate your engagement with the CDF process and to reduce the late payment interest that is accruing.
The 60 days allowed to do all
of this is relatively short period,
so it is advisable to seek specialist
help very quickly at the outset.
After the initial formalities above have been completed, HMRC will take a back seat and allow your advisor to work with you to produce a detailed financial report.
HMRC will expect to be kept informed of progress at regular intervals, which may involve regular meetings between us and HMRC.
