Code of Practice 8 Investigations (COP8)

HMRC's Fraud Investigation Service Directorate actively and intrusively investigates many individuals, businesses, companies, trustees, structures (onshore and offshore) and other scenarios under the COP8 process.

In COP8 cases, HMRC does not suspect tax fraud and therefore does not use its Contractual Disclosure Facility (COP9 or CDF).

The COP8 is typically used by HMRC to investigate tax avoidance schemes or arrangements that may mitigate taxes.

Some typical COP8 cases involve large amounts of money that HMRC believes should be paid, high profile or wealthy individuals in the public eye, international tax or VAT issues where the UK is just one jurisdiction, or complex tax affairs or arrangements. If HMRC believes there is an attempt to pay less tax than the correct amount, or if a taxpayer seeks a tax advantage from a tax scheme or arrangement, they will investigate the matter thoroughly under COP 8.

The goal of HMRC is to challenge the position and recover the tax due along with interest and penalties (up to 100% for onshore matters and 200% for offshore matters). Even though COP8 is not a tax fraud investigation according to CDF or COP9 standards, HMRC may transfer the case to one of the CDF or COP9 or even initiate criminal proceedings.

COP8 investigations should be handled by an experienced practitioner, according to HMRC.

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