Investigations under Code of Practice 9 (COP 9) – cases of suspected tax fraud

HMRC issue Code of Practice 9 (COP 9) in selected cases where they suspect tax fraud. In many cases HMRC carry out criminal investigations of suspected fraud with a view to prosecution. However, under this Code of Practice, HMRC offer taxpayers the chance to make a full disclosure under a contractual arrangement called a Contractual Disclosure Facility (CDF).

If a taxpayer co-operates fully with HMRC’s investigation, the taxpayer will achieve a greater reduction in any penalty found to be due. The taxpayer may also be able to avoid other civil sanctions such as insolvency and, in some cases, the publication of their details on HMRC’s website under Managing Serious Defaulters programme.

When is COP 9 issued?

HMRC issues COP 9 at the start of a challenge when they have information that gives them reason to suspect that a taxpayer has committed tax fraud. At this stage, HMRC does not know a taxpayer has committed tax fraud as whatever the information is may be capable of simple explanation.

It is at this stage that a taxpayer is offered the CDF which the taxpayer either accepts or rejects the offer of CDF.

COP 9 and the CDF are parts of a process where there are key stages throughout. Failure to meet any of the key stages will result in the failure of the CDF process and the possible withdrawal of COP 9. HMRC may then decide to investigate on a criminal basis.

How long will the process take?

There is no set timetable as each matter is dependant upon its own facts. Some matters can take less than 6 weeks to conclude from start to finish if there is no case to answer, more complicated matters can take years. HMRC stated aim is to complete matters within 6 months of the date of the first meeting.

Help is at hand

If you would like to discuss this matter further, please contact me at paul@pmc.tax or on 07979 313 010.

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