What is it?
The HMRC Code of Practice 9 (COP 9) process can be initiated in one of 2 ways:-
- HMRC issue this Code of Practice in selected cases where they suspect tax fraud.
- You voluntarily disclose to HMRC under this code that you have made deliberate errors in some tax returns.
When HMRC suspect that fraud has taken place they may commence criminal proceedings against a company or individual. But under this Code (COP 9), they offer you instead the chance to make a full disclosure under a contractual arrangement called a Contractual Disclosure Facility (CDF).
You have 60 days to respond once an offer is made. If you make a full disclosure of your deliberate conduct, they will NOT pursue a criminal investigation with a view to prosecution.
They expect you to stop any deliberate conduct that has led or may lead to a future tax loss immediately. A specially trained authorised HMRC officer will handle the COP 9 investigation into your tax affairs and you will be given a named contact.
If you co-operate fully with HMRC’s investigation, you will achieve a greater reduction in any penalty found to be due. You may also be able to avoid other civil sanctions such as insolvency and, in some cases, the publication of your name and details.
To comply with the terms of the CDF, you will be admitting to HMRC that tax has been lost because of your deliberate conduct. This means HMRC may be able to seek recovery of the tax, interest and associated penalties you may have evaded for as far back as 20 years.
If you enter into a CDF contract HMRC expect you to co-operate fully with them. Full co-operation will ensure that you achieve the greatest possible reductions for any penalty that may be due on completion of the process.
If you do not believe that you have brought about a loss of tax through your deliberate conduct you can sign and return the CDF Rejection Letter, within the same 60-day period. HMRC will be happy to consider any explanations or documents that support your rejection. You should only choose the rejection route if you genuinely believe that you have not brought about a loss of tax through your deliberate conduct. If you sign the Rejection Letter, HMRC will start its own investigation which can be a criminal investigation. Your Rejection Letter may also be used in court or tribunal proceedings as evidence. If HMRC decide to proceed with a civil investigation in response to your rejection of their offer they reserve the right to escalate the case to a criminal investigation at a later date if they consider it is appropriate.
We have vast experience of dealing with the HMRC COP 9 process so whatever stage you are at with it, whether you have just received the initial letter or whether the investigation is complete and you have a large bill and penalties that you can’t immediately pay back please get in touch.
For a free no obligation chat to discuss how we can help please call us now (24/7) on 0800 980 2662 or 0161 825 8094. We cover the whole of the UK.
