Should I accept the CDF offer?
If you accept, you will receive immunity from criminal investigation and/or prosecution, in return for:
- An admission of deliberate behaviour
- Full disclosure of all omissions, errors or irregularities
- Full cooperation with HMRC
You only receive immunity for what you disclose. HMRC FIS will not advise you of the risks they identified that led them to opening the COP9 investigation. If you disclose only a proportion of the tax irregularities committed, the undisclosed irregularities remain unprotected and you run the risk of HMRC discovering you made a false or incomplete disclosure.
By accepting the CDF offer, you are admitting to having committed fraud which will lead to higher financial penalties than in non-deliberate inaccuracy cases. Therefore, it is imperative that you did in fact act deliberately under HMRC’s behaviour guidelines.
Just because HMRC FIS has started a COP9 investigation and issued a CDF offer, it does not mean you should, or have to, accept the CDF offer. Many non-specialist advisers wrongly convince clients to accept the CDF offer and disclose all irregularities as deliberate even when the behaviour is in fact non-deliberate.
The distinction between deliberate and non-deliberate irregularities can be complex. At Buzzacott, we view each case on its own merits and facts. We have never had a case where HMRC FIS has shown that our client’s rejection of the CDF offer was wrong. We have not had a case where we have viewed irregularities as arising from non-deliberate behaviour and HMRC has shown it to be deliberate behaviour, even in cases where our client has accepted the CDF offer due to some, but not all, deliberate behaviour. We are also sometimes approached, most unfortunately, by people who were advised to accept the CDF offer by their previous adviser when in fact they should have rejected it. We would always advise seeking professional advice prior to making a decision of accepting or rejecting the CDF offer.