Have you received a Code of Practice 9 or COP 9 letter from HMRC?
If yes, this is a very serious matter and you should not waste time as this type of tax investigation can have serious consequences including criminal prosecution. Speak to our specialists at Churchill Tax Investigation in Sutton for your options and how best to close the COP 9 enquiry.
What is Code of Practice 9 Investigation or Contractual Disclosure Facility
Facing a Code of Practice 9 or COP 9 tax investigation can be a stressful and worrying time. These investigations, known as Code of Practice 9 are initiated by HMRC if they suspect tax fraud. During this investigation they will incorporate the Contractual Disclosure Facility (CDF). In line with this code of practice 9 investigation, the taxpayer will be given the opportunity to disclose both deliberate and non-deliberate conduct which has resulted in discrepancies which have occurred in their tax affairs.
Information held by HMRC prior to starting Code of Practice 9 enquiry
If HMRC has suspicions that a business or individual has failed to disclose all irregularities they can instigate a criminal investigation and launch criminal proceedings. If the business or individual discloses the discrepancies, HMRC generally don't begin criminal investigations into the questionable conduct of the business or individual.
Code of Practice 9 investigation process explained
When a Code of Practice 9 or COP 9 tax investigation is instigated, there are stringent guidelines that you must follow:
The individual or business must provide a response to the opening letter from HMRC within a period of 60 days. This response must either accept the terms of the CDF and provide an outline disclosure or deny any fraudulent activity.
A full disclosure must be made of all tax irregularities over a specified time period The process must also allow for the necessary certificates to be completed
While the investigation is ongoing, the person under investigation will be asked to attend a meeting before they prepare and submit the full disclosure report.
If the individual under investigation fails to respond to the initial letter sent by HMRC, they fail to cooperate or the disclosure is considerably lacking, HMRC may automatically decide to launch criminal investigations. In situations where someone wants to disclose tax fraud on a voluntary basis, the CDF can also be applied.
The Code of Practice 9 investigations can request accounts and tax going back as far as 20 years. COP 9 investigations are usually launched when HMRC believe that they can recover over £75,000 in tax. That said, there is no strict threshold for COP 9 investigations to be instigated. COP 9 investigation processes are usually dealt with through civil law but failure to comply can result in them being dealt in terms of criminal law.
Immunity provided by Contractual Disclosure Facility
In line with the Contractual disclosure Facility or CDF, HMRC will agree not to prosecute provided that you:
- Respond to the initial HMRC letter within 60 days.
- Notify HMRC about any tax that you have evaded
- Make a statement of truth to confirm that you have provided accurate and complete information
- Agree to pay all interest, tax and penalties which result from the investigation
- Cease any tax evasion activities with immediate effect
If the business owner or individual cooperates fully with HMRC they will also be asked to complete what is known as the Initial Outline Disclosure Report. At a high level, this document will include:
- Descriptions of deliberate conduct (that resulted in underpayment of tax)
- Individuals and Entities involved
- The period of time over which the deliberate conduct took place
- The approximate amount of tax, duty etc that you believe you owe as a result of your disclosure
- Records available to support your disclosure
- Other information you think is relevant
- Details of any non-deliberate tax irregularities
The person must sign the Outline Disclosure Report as well as the form of Acceptance of Contractual Disclosure Facility under Code of Practice 9.
Seeking advice when your receive COP 9 investigation letter
HMRC strongly recommend that anyone who is subject to a COP 9 investigation obtains advice from a tax investigations specialist or a tax advisor who can guide them through the entire process. This is where we can help.
How our team of tax specialist can help you
At Churchill Tax Investigations, we only employ the highest calibre and most experienced Ex-HMRC Tax Inspectors and Chartered Tax Advisors with specialist expertise in the management of COP 9 investigations. Our dedicated team of Code of Practice 9 specialists can help you:
- Take control of the entire Code of Practice 9 investigation
- Formulate the Initial Disclosure Report
- Meet with client and their accountant
- Meet with HMRC and agree a strategy
- Gather information required to be submitted to HMRC under Contractual Disclosure Facility
- Advise client on best possible options under COP 9 Contractual Disclosure Facility
- Submit a full report under Contractual Disclosure Facility
- Enter into negotiations with HMRC to reach a full and final settlement
- Negotiate a suitable payment plan for client
We know that this can be a difficult time and can help make the process of responding to HMRC and the CDF a little easier. Contact our team today to find out how we can help you with your COP 9 investigation.