Using the Contractual Disclosure Facility
The Contractual Disclosure Facility (CDF) is a process that allows taxpayers to voluntarily disclose serious tax fraud to HMRC. It is intended exclusively for individuals who admit to committing tax fraud—it is not designed for reporting mistakes, errors, or tax avoidance arrangements where no fraud has occurred.
If HMRC suspects someone of tax fraud and contacts them, they may be given the opportunity to use the CDF. Taxpayers who wish to voluntarily come forward about their involvement in tax fraud can also initiate the process by submitting a CDF1 form.
When entering into the CDF, HMRC agrees not to pursue a criminal investigation or prosecution for the disclosed fraud, provided the taxpayer meets all the terms of the agreement.
These include:
- Admitting that their deliberate actions resulted in a tax loss.
- Disclosing all tax losses caused by their deliberate conduct.
- Providing as much detail as possible within 60 days of receiving the CDF offer.
- Submitting a full report after the 60-day period, including a signed statement confirming that all deliberate conduct has been fully and accurately disclosed.
- Cooperating fully with HMRC to resolve their tax affairs.
- Paying all tax, interest, duties, and penalties owed.
If these conditions are fulfilled, HMRC will handle the case using its civil powers, aiming to reach a financial settlement that includes the tax owed, interest, and penalties.
