Our approach
Serious tax investigations are dealt with by HMRC’s Fraud Investigation Service (FIS). These are extensively trained and often more experienced individuals who are tasked with investigating cases where there is either a suspicion of tax loss through an individual’s deliberate acts or omissions, or a belief that too little tax has been paid but fraud is not suspected.
HMRC receive vast amounts of information and data from third parties both within and outside of the UK, which has led to an increase in the number of serious tax investigations. Menzies experts are vastly experienced in guiding clients through all serious tax investigations and disclosures. We can help clients achieve the best possible outcome and have a track record of doing just that. It is always better to be proactive and, under expert guidance, approach HMRC before waiting to be approached by them whenever possible.
You do not need to wait for HMRC to start investigating, and by following Menzies’ advice you will receive the greatest protection. We strongly encourage you to contact us without delay.
Code of Practice 9 COP9
Cases are dealt with under COP9 where HMRC either suspect, or the individual voluntarily discloses, that their deliberate action or inaction has led to an insufficient amount of tax being paid. HMRC refer to such behaviour as “tax fraud” but this is more commonly known as tax evasion. Code of Practice 9 cases are processed through HMRC’s Contractual Disclosure Facility (CDF) and taxpayers will either be issued with COP9 by HMRC, or can choose to voluntarily use the facility.
The principal benefit of COP9 for taxpayers is provided a full disclosure is made then HMRC will guarantee immunity from criminal prosecution.
There is a formal process to follow with strict deadlines to meet so assistance from an experienced Tax Disputes advisor is highly recommended, and it is better to appoint a COP9 specialist advisor such as Menzies at the earliest opportunity.
What is COP9?
When investigating tax fraud, HMRC may decide to investigate suspected cases of fraud using Code of Practice 9 or COP9, which is a civil, as opposed to criminal, investigation. COP9 gives a taxpayer the opportunity to make a complete and honest disclosure of all their deliberate behaviour that has brought about a loss of tax, and as long as they do so, they should receive immunity from criminal prosecution.
What is involved the COP9 procedure? Is it right for me?
To find out more about the COP9 process, please read our article here which details the steps of the COP9 process and why it might be appropriate for you to apply for COP9.
One of the main reasons to use COP9 is immunity from criminal prosecution if you make a full and complete disclosure to HMRC.
You can apply for COP9, or HMRC may offer you COP9. If you are offered it, you should consider carefully whether to accept or reject.
Will I go to prison?
You can be criminally prosecuted for tax fraud. However, if you apply for COP9, or if HMRC offer COP9 to you and you accept, then provided you make a full and complete disclosure to HMRC to the best of your knowledge and belief, you will receive immunity from criminal prosecution.
Admitting to tax fraud will attract financial penalties, however.
What are the penalties under COP9?
Deliberate behaviour attracts the higher rates of penalties, especially if the behaviour is ‘concealed’.
A specialist COP9 adviser will be able to help you mitigate penalties where possible, as part of the COP9 process.
How much do I have to declare to HMRC under COP9?
Admitting to deliberate behaviour is necessary to enter into COP9, and that means you need to disclose tax loss as a result of deliberate behaviour going back up to 20 years.
Do not worry if you do not hold records going back that far; some data can be retrieved e.g. from banks directly, and a specialist COP9 adviser will help you navigate any tax years where you need to use assumptions or estimate the liabilities.
If you discover other tax irregularities for example due to careless behaviour, you should use the opportunity to disclose these as well as part of the COP9 process so you can end on a clean slate with HMRC, but note the difference in time limits to disclose where behaviour is not deliberate.
How long will the COP9 process take?
You should expect the COP9 process to take at least several months, and in some cases years, to complete. Appointing a specialist COP9 adviser is recommended by HMRC and this can help ensure the disclosure is being completed efficiently at every stage, and to the standard HMRC require.
It is also beneficial to have someone experienced in COP9 help you navigate the process. A COP9 adviser can be appointed in addition to your regular tax adviser or accountant.
Code of Practice 8 COP8
Cases dealt with under COP8 are those where HMRC suspect there has been an insufficient amount of tax paid, but “fraudulent behaviour” is not suspected. HMRC investigations into tax avoidance arrangements or where there is a potential risk of significant tax loss are typically dealt with under COP8.
If you require advice on either COP9 or COP8, we strongly recommend you call us immediately for a free and confidential discussion.
Understanding HMRCs Code of Practice 9 (COP9)
