VAT fraud amnesty

From 31 January 2012 HMRC will offer a new Contractual Disclosure Facility (CDF), under which those suspected of fraud will be able to avoid criminal investigation by taking advantage of the facility.

Under the CDF HMRC will contact a taxpayer, in writing, to inform him that he is suspected of serious tax fraud.


 HMRC will offer the taxpayer the opportunity to enter into a contract to disclose that fraud within 60 days. In return, HMRC will agree not to criminally investigate, removing the risk of prosecution by HMRC. The investigation will then be carried out usingcivil powers, with a view to a civil settlement for tax, interest and a financial penalty. Those who do not respond positively to HMRC's offer will face a full investigation by HMRC, possibly a criminal investigation with a view to prosecution. Moreover, HMRC say that anyone who signs the contract but does not go on to admit and disclose fraud will also face the possibility of a criminal investigation.

In addition, taxpayers who are not under investigation but who want to admit to tax fraud may fill out a form to voluntarily request that HMRC consider their suitability for a CDF arrangement. In these circumstances HMRC will retain discretion to decide which cases are dealt with civilly, and which are investigated with a view to criminal prosecution.