The number of successful taxpayer applications to use HMRC‘s contractual disclosure facility (CDF) has fallen by 20% over the last two years, according to figures obtained by Pinsent Masons.
The CDF opened in January 2012 and offers taxpayers suspected of serious tax fraud the chance to enter into a contract to make a disclosure within 60 days, in return for civil, rather than criminal investigation under the Code of Practice 9 procedure.
HMRC entered into 438 agreements in 2018/19, down from 486 in 2017/18 and 20% lower than the 549 agreements entered into in 2016/17.
Steven Porter, partner at Pinsent Masons, attributes HMRC’s waning enthusiasm for the CDF to the growing amount of data it now receives through information exchange under the common reporting standard. However, he believes the CDF still offers a powerful incentive for taxpayers to come forward and declare hidden sources of income.
‘Regardless of the success of information exchange initiatives, HMRC should continue to market the contractual disclosure facility and similar schemes. The tax authority collected £95.8 million in tax through agreements under the scheme last year, up from £91.1m in 2017/18’, Porter said.
The number of successful taxpayer applications to use HMRC‘s contractual disclosure facility (CDF) has fallen by 20% over the last two years, according to figures obtained by Pinsent Masons.
The CDF opened in January 2012 and offers taxpayers suspected of serious tax fraud the chance to enter into a contract to make a disclosure within 60 days, in return for civil, rather than criminal investigation under the Code of Practice 9 procedure.
HMRC entered into 438 agreements in 2018/19, down from 486 in 2017/18 and 20% lower than the 549 agreements entered into in 2016/17.
Steven Porter, partner at Pinsent Masons, attributes HMRC’s waning enthusiasm for the CDF to the growing amount of data it now receives through information exchange under the common reporting standard. However, he believes the CDF still offers a powerful incentive for taxpayers to come forward and declare hidden sources of income.
‘Regardless of the success of information exchange initiatives, HMRC should continue to market the contractual disclosure facility and similar schemes. The tax authority collected £95.8 million in tax through agreements under the scheme last year, up from £91.1m in 2017/18’, Porter said.
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