This article looks at the ‘outline disclosure’ aspect of HMRC Contract Disclosure Facility.
What Is A Contract Disclosure Facility ‘Outline Disclosure’?
You will be issued with the outline disclosure documents in one of two scenarios. A) You or your agent has applied for immunity from prosecution under the Contract Disclosure Facility. B) HMRC suspects that you have committed ‘serious tax fraud’. In this case HMRC has chosen to offer you immunity from criminal prosecution in return for a full disclosure. Full disclosure means giving all information concerning deliberate and non-deliberate tax irregularities.
Contained within the outline disclosure letter there are two key documents. The first is an acceptance notice, the second is a rejection notice. Whether you believe that you have committed tax fraud or not, a CDF letter from HMRC should never be ignored. If you ignore HMRC’s letter, then it will likely commence a criminal investigation into your tax affairs.
What is Code of Practice 9 (COP9)?
Code of Practice 9 is the official name of the procedure that HMRC uses to offer the Contract Disclosure Facility.
The terms ‘CDF’, ‘Contract Disclosure Facility’, ‘COP9’ and ‘Code of practice 9’ are often used interchangeably.
HMRC publishes a COP9/CDF help booklet that can be found by clicking here. As you can see, HMRC itself recommends using an advisor when entering into COP9.
60 Days – An Important Deadline
The 60-day deadline is strict and is the only firm deadline applicable to the COP9 process.
From the date of receiving the HMRC Contract Disclosure Facility offer letter you will have 60 days to take action. You need to either return the rejection notice (if you believe you have done nothing wrong) or acceptance notice along with the outline disclosure documents. HMRC will then write to you in due course confirming your decision.
What Do I Need To Tell HMRC? What If I Don’t Disclosure Everything?
The offer of immunity from criminal prosecution only applies to irregularities identified in the outline disclosure. HMRC reserves the right to undertake a criminal investigation in respect of anything undeclared in the outline disclosure itself. Therefore, it’s extremely important that the COP9 outline disclosure contains details of all deliberate and non-deliberate inaccuracies.
How Much Detail Should I Go Into?
It’s more important that all irregularities are at least identified in the outline disclosure than it is to go into significant detail. Your advisor should walk you through the documents and advise on the level of detail that needs to be included. However, your outline disclosure documents should not be deliberately vague. This could result in increased penalties when HMRC come to assess your overall liability – see ‘telling, helping and giving’.
Submitting the HMRC Contract Disclosure Facility Outline Disclosure – What Happens Next?
Once the outline disclosure documents have been submitted, HMRC will then confirm receipt. Approximately 3 to 6 weeks later HMRC will then confirm that it will not be proceeding with a criminal investigation in respect of anything contained within the outline disclosure – assuming the documents were completed correctly. Should HMRC feel that it has additional information, not in the outline disclosure, then the acceptance letter will state this.
At this point immunity from criminal prosecution regarding your tax affairs is in place. Your advisor should now focus on working with you to submit the ‘full disclosure’.
If you have any questions regarding the outline disclosure of CDF/COP9 process in general, then please don’t hesitate to contact us using the ‘Contact Us’ link on our website – www.tmsterling.co.uk