Code of Practice 9 (COP9) Tax Investigation Specialists

Receiving a Code of Practice 9 (COP9) letter from HM Revenue & Customs (HMRC) is a serious matter.

COP9 is HMRC's civil investigation procedure used in selected cases where HMRC suspects tax fraud. It provides an individual with the opportunity to make a disclosure through the Contractual Disclosure Facility (CDF).

If you have received a COP9 letter, obtaining specialist advice before responding can be extremely important.

GSC Consultancy provides specialist COP9 representation based on extensive experience of HMRC fraud investigations, including former HMRC Fraud Investigation Service experience.

What is a COP9 investigation?

COP9 is not an ordinary HMRC compliance check.

HMRC states that it issues COP9 in selected cases where it suspects tax fraud. Under the CDF, HMRC offers the individual an opportunity to disclose deliberate behaviour that has resulted in a loss of tax or duty.

The implications are therefore significantly different from a routine tax enquiry.

What is the Contractual Disclosure Facility?

The Contractual Disclosure Facility is the formal arrangement underpinning a COP9 investigation.

Where the CDF is accepted and the taxpayer makes the required full disclosure of deliberate behaviour, HMRC undertakes not to commence a criminal investigation into the suspected fraud connected with the disclosed behaviour.

The protection is important, but so are the obligations undertaken by the taxpayer.

HMRC's current COP9 guidance provides a 60-day period from receipt of the CDF offer in which the individual must accept or reject it.

A COP9 letter should therefore never simply be ignored.

Should I accept a COP9 offer?

This requires careful consideration of the particular circumstances.

Acceptance of the CDF has important consequences. HMRC states that entering into the CDF involves admitting that deliberate behaviour has resulted in a loss of tax, duty or a payment administered by HMRC.

Conversely, HMRC also states that the CDF is not suitable where there are only careless errors or mistakes to disclose.

That distinction can be fundamental.

Before deciding whether to accept or reject a CDF offer, we can review the known facts, explain the implications of each option and help you make an informed decision.

Preparing the Outline Disclosure

Where the CDF is accepted, particular care needs to be given to the Outline Disclosure.

The disclosure needs to identify and explain the deliberate conduct being disclosed.

This is not simply an administrative form-filling exercise.

We can work with you to establish the relevant facts, identify the tax issues and prepare the disclosure in a clear and accurate manner.

What happens after the Outline Disclosure?

A COP9 investigation can involve a detailed examination of an individual's tax affairs.

Depending upon the circumstances, this can include reviewing business records, bank accounts, transactions, company arrangements, offshore interests, assets and other financial information.

A detailed Disclosure Report may ultimately be required.

HMRC's own operational guidance recognises Disclosure Reports as a feature of COP9 cases under the CDF.

COP9 penalties and settlement

A COP9 investigation will normally require consideration of the underlying tax, interest and penalties.

The penalty position can be particularly important because COP9 concerns suspected deliberate behaviour.

We analyse the relevant behaviour, disclosure position, tax periods and penalty legislation rather than automatically accepting HMRC's proposed penalty position.

Our objective is to establish the correct tax liability and achieve an appropriate resolution based on the evidence and applicable legislation.

Former HMRC COP9 experience

COP9 is a specialist area.

Our experience includes working on Code of Practice 8 and Code of Practice 9 cases within HMRC's Fraud Investigation Service.

That experience provides an understanding not only of the relevant tax rules but also of how complex HMRC investigations are conducted in practice.

Received a COP9 letter?

Do not ignore the letter or make admissions without understanding their implications.

Contact GSC Consultancy for a confidential discussion with a specialist experienced in HMRC COP9 investigations.