Both COP8 and COP9 tax investigations are only conducted by HMRC FIS, HMRC’s elite investigation office, who should not be under-estimated. Specialist representation is essential, which is why HMRC FIS openly advise those subject to both COP8 and COP9 tax investigations to seek expert help.
HMRC opens the vast majority of its COP8 investigations in circumstances where it holds suspicion that the taxpayer has underpaid a significant amount of tax as a result of complex tax arrangements, particularly involving offshore aspects. HMRC’s aim is to successfully challenge your tax affairs and to recover tax, interest and penalties.
Should HMRC establish evidence of tax fraud or irregularities resulting from deliberate or deliberate and concealed behaviour, HMRC may change the investigation to COP9 status, or even commence a criminal investigation.
A COP9 investigation is undoubtedly the most serious type of civil investigation undertaken by HMRC. All HMRC officers who undertake COP9 tax investigations are specialist fraud-trained investigators.
HMRC opens a COP9 investigation in circumstances where it suspects an understatement of tax, and the underlying behaviour for that irregularity is due to a taxpayer’s dishonesty and fraud. Taxpayers are given 60 days to accept or reject HMRC’s Contractual Disclosure Facility (CDF) offer. Should they accept they will be required to make an Outline Disclosure of all deliberate and non-deliberate irregularities.
Should you be placed under COP9 tax investigation, HMRC’s published view is as follows:
“You are strongly recommended to seek specialist independent professional advice … many people find it helpful to appoint a specialist adviser who is familiar with this Code of Practice, in addition to their regular advisor.”
When considering appointing specialist representation, clients and advisers should ask themselves these questions:
- Do you feel comfortable dealing with HMRC FIS?
- Are there any errors in your tax affairs that you should disclose and, if so, how did these errors happen?
- What happens if the COP8 investigation escalates to a COP9 fraud investigation or criminal investigation?
- What are the overall implications of the COP8 or COP9 investigation?
- Could potential penalties be involved and do you know how best to minimise these?
- What is the best way of addressing your tax affairs to secure a better settlement or outcome with HMRC?
- Should you accept the CDF offer within the 60 days it is available to you
- What happens if you reject the CDF offer?
- Can you go to prison?
- Are you concerned about being publicised as a serious tax defaulter?