An investigation by one of HMRC’s specialist divisions can carry serious risks to you or your business.

We have significant experience with these investigations and can advise on the best approach.

Code of Practice 8

HMRC carries out a Code of Practice 8 (COP8) investigation when it believes that large amounts of tax are at risk as a result of complex tax arrangements, tax avoidance schemes or compliance failures.

A COP8 investigation can cover all types of tax, both current and retrospective. Even if the time limit to open an enquiry into a return has elapsed, one can still be triggered. HMRC will investigate to recover any tax, interest and penalties due, seeking meetings and making use of their formal information powers.

Due to the size of business that COP8 investigations typically focus on, cases often have international aspects. The global tax information that HMRC receives through the Common Reporting Standard (CRS) will allow them to investigate international tax discrepancies.

We can help you navigate an investigation, undertaking a proactive review of HMRC information requests and working collaboratively with you and HMRC. Our thorough approach addresses all risks and supports early resolution of HMRC concerns.

Code of Practice 9 and the contractual disclosure facility

While HMRC policy is to seek a civil settlement in the majority of cases, it is getting tougher on tax evasion and undertaking criminal investigations across the UK. Where HMRC suspects that tax has been underpaid as a result of deliberate conduct or fraud it will consider a criminal prosecution. Where that route is not pursued, it often issues a Code of Practice 9 (COP9) and uses the contractual disclosure facility (CDF) process.

This may be proposed by either HMRC or the taxpayer, and involves making a voluntary disclosure about any fraud the taxpayer has been involved in. Under the CDF, taxpayers have 60 days to provide an outline disclosure and commit to a fully voluntary disclosure in a defined timescale in return for a civil settlement including tax, interest and penalties.

CDF cases require careful handling as incomplete disclosures may lead to higher penalties or even revert back to a criminal investigation. Meetings with HMRC are part of the CDF process and specialist advice is essential at all stages.

Our team includes senior ex-HMRC COP9 investigators who have handled all aspects of COP9 work for many years.

Criminal investigations

If you receive notification from HMRC of their intention to investigate your tax affairs criminally, or they ask you to cooperate with a potential criminal investigation into a third party, you should seek immediate professional advice.

Criminal investigations with a view to prosecution are an important part of HMRC's enforcement and deterrent strategy. If you are aware of serious irregularities in your tax affairs then, depending on the circumstances, a voluntary disclosure may be advisable using the CDF. However, it is for HMRC to decide how to respond to any disclosure and expert advice as to the best approach is essential.

Where a criminal investigation appears possible, legal advice should be obtained. Our team has extensive experience of working alongside lawyers so that you may determine the best approach. We have also worked with a range of leading law firms to provide expert reports where specialist knowledge of HMRC investigation and dispute processes are required.

The best way to avoid an investigation is to regularly review your risk - we can carry out a healthcheck of your arrangements to identify issues early. If you do find yourself under investigation, get in touch with a member of the team to discuss how we can help.

Director David Francis

+44 (0)121 2325 425

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