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Code of Practice 9 (COP 9)

What is a COP 9?

The Code of Practice 9 is issued when HMRC suspects serious tax fraud has taken place. Using its Fraud Investigation Services (FIS) team, HMRC conducts the Contractual Disclosure Facility (CDF) process. A person can use the facility only if he or she is willing to admit the offence. In cases where there is no clear avoidance with the intention to defraud, it isn't suitable for reporting obvious errors or avoidance schemes. The HMRC offers COP 9 to those seeking to own up in case they are prepared to settle the tax liability civilly instead of criminally.

The Contractual Disclosure Facility – CFD Explained

The CDF Offer is sent to suspected taxpayers when HMRC suspects they are tax evaders. Within a suggested 60-day period, an outline disclosure (OD) must be made. From the beginning, the OD sets out all individual and tax irregularities. HMRC receives information from a variety of sources. However, they will not tell you what information they hold or what suspicions they have. You must disclose all relevant information to them. It is unlikely that HMRC will undertake a COP 9 investigation unless they have firm evidence of the offence. It is not suitable for those who wish to notify HMRC of careless mistakes, errors, or tax avoidance schemes. Accepting the offer will protect you from criminal prosecution and investigation.

The immunity you receive will only apply to the information you disclose, but in return, you must:

• An admission that your behaviour was deliberate.
• Full disclosure of all irregularities and omissions.
• Additionally, you should cooperate fully with HMRC

There are three options if you have received a COP 9 letter:

• Owning up: The Contractual Disclosure Facility route.
• Denial: Denial of any wrongdoing.
• The Non-Cooperation route: Ignoring HMRC's letters and offers

If the taxpayer signs the document and owns up, HMRC will not pursue a criminal investigation. An expiry date is printed at the top of the Outline Disclosure form for accepting the offer and submitting it. Under no circumstances will the deadline be extended.

The COP 9 Outline Disclosure

The outline disclosure should contain the following details:

• What was the nature of the tax fraud?
• In what way was it committed?
• Are there any other people or entities involved?
• How did the fraud benefit you?

If there has been no fraud, sign and return the COP 9 denial letter to HMRC. When HMRC accepts your denial, they will confirm they no longer suspect you. A false denial may result in you being referred to the Criminal Investigation Team. The denial letter is used as evidence in court or tribunal proceedings. If you sign the contract before seeking professional, specialist advice, it may have serious repercussions. Contacting HMRC directly is not recommended. Remember that all conversations are recorded and can later be used against you as evidence.

How Will HMRC React If I Ignore Them?

When you ignore everything and don't contact HMRC, either independently or through a professional advisor, HMRC will continue to investigate your tax affairs. There may be a civil or criminal prosecution as a result. If they succeed in pursuing this, the penalties will be much higher than if you had cooperated fully in the first place. A form 64-8 can be filled in to authorize us to represent you at the COP 9 on your behalf.

Is Professional Help Necessary?

As mentioned above, HMRC does not divulge information it holds about you before or during COP 9 investigations. For a non-specialist advisor, this makes navigating the process and advising whether to accept the CDF offer extremely challenging. Individuals could suffer a great deal if they make the wrong move. When under investigation, HMRC encourages individuals to seek independent advice, especially from those familiar with the COP 9 process. It is much more likely that you will achieve a favorable outcome if you speak with a specialist advisor like us, and get proper help. In addition to the high level of stress of meeting with HMRC on your own, the penalties can be severe.

Code of Practice 9 – 10 Questions Asked

• Investigations conducted under COP9 regulations follow a specific protocol.
• At the time of an interview, HMRC investigators ask six set questions on Direct Taxation and four on Indirect Taxation. Aside from that, nothing else.
• Interviews conducted under Code of Practice 9 follow a standard format.
• An investigator and his colleague introduce themselves at the beginning of the interview.
• After explaining the purpose of Special Civil Investigations or Civil Investigations of Fraud, the HMRC investigator will tell you that HMRC has discovered information that indicates the taxpayer's accounts may be incorrect.
• There may be an innocent explanation, but the investigator will explain it is his duty to investigate thoroughly.
• Having reached this point, HMRC feels reasonably confident about their case.
• Prior to the interview, they will have conducted a thorough investigation, bringing potentially damaging information with them.
• During the interview, HMRC discusses both direct and indirect tax matters.
• The meeting is structured so that the taxpayer knows what tax is being discussed. Each one dealt with separately.

You should hire an expert who is familiar with HMRC tax investigations to handle your case. Don't speak to them until you've spoken to us. Bolton Tax Accountants will prepare a Disclosure Report on your behalf. It also includes answers to questions not asked by the investigator during the meeting. We will handle your tax investigation, so you can carry on with your life.