Where HMRC suspects tax fraud or tax evasion, it can pursue matters via a criminal prosecution or along civil lines.
If HMRC uses a civil process, the investigation will be conducted in accordance with HMRC’s Code of Practice 9 (COP9).
Your options under COP9
Once HMRC issues COP9, it will also offer an opportunity to disclose the nature of the tax fraud. This offer is known as the Contractual Disclosure Facility (CDF).
There are only two options under the CDF:
- Owning up
- Not replying to the CDF (non-cooperation route).
If you accept the terms of the CDF, an outline disclosure setting out the full details of your tax needs to be submitted to HMRC within 60 days of the CDF offer.
Where the offer of the CDF is accepted by both parties, HMRC will request that you attend a meeting with them. Attendance is not compulsory but will demonstrate engagement with the process.
The COP9 investigation process
Once HMRC has issued COP9 to you, you automatically receive immunity from prosecution for the tax offence.
If you do not respond to the CDF offer, or their outline disclosure is invalid, HMRC will treat this as rejecting the CDF offer. HMRC could then commence either a civil or a criminal investigation into the tax fraud they suspect of being committed.
When the nature and extent of the tax fraud are straightforward, it may be possible to conclude the CDF without preparing a formal disclosure report. However, in more complex cases, a report will be required to explain and support how the fraud has been committed.
The CDF route may also be appropriate in cases of voluntary disclosures of tax fraud.
Why you should contact us
Our experienced team has a significant amount of experience in handling and resolving tax fraud cases and will be able to assist you with the COP9 procedures and terms of the CDF. We can assist by drafting disclosure reports and negotiating with HMRC.
For more information or help from one of our tax investigation specialists, please contact us using our enquiry form.
