Code of Practice 9 investigations

Code of Practice 9

Code of Practice 9 (also known as the Contractual Disclosure Facility – CDF or COP9 for short) is used by HMRC when they suspect tax fraud and offer the person suspected a chance to make a full admission, pay taxes owed with interest and a cash penalty, in return for not commencing a criminal investigation. This is a complex and high risk area where time limits are short and expert advice is essential. Trident have former HMRC COP9/CDF team leaders and investigators who have handled scores of  COP9/CDF cases over many years from both sides of the fence.

What is it?

When HMRC suspect serious tax fraud they may decide to pursue a criminal investigation with a view to prosecution. However, in cases where a criminal investigation is not started, HMRC will typically start a civil investigation (i.e. not with a view to criminal prosecution) by issuing a copy of the Code of Practice 9 (COP9) procedure to the person suspected of the serious tax fraud. Under this procedure, the recipient of COP9 is given the opportunity to make a complete and accurate disclosure of all irregularities in their tax affairs. On receipt of the COP9 procedure, the recipient is given  60 days to confirm whether or not they will enter into the process. If a full disclosure of all tax irregularities is then made, HMRC will not pursue a criminal investigation with a view to prosecution but will seek to enter into a cash settlement to include any unpaid taxes, interest and a penalty.

What happens?

If you agree to the COP9 process and opt to make a disclosure of tax irregularities you will be required to submit an outline disclosure to HMRC within 60 working days of receiving COP9.

In straightforward cases, and where the outline disclosure aligns with HMRC’s expectations, it may be possible to settle the investigation without much further work or delay.

In less straightforward cases, HMRC will likely require you to prepare a more detailed report of all tax irregularities to be submitted to a timetable agreed with them. HMRC recommends, and so do Trident, that you appoint an advisor to assist you with such a report. HMRC are also likely to ask for meetings with you and your advisor in these cases and you should take advice about how best to approach any meetings.

In cases where the outline disclosure or the more detailed disclosure report prompts HMRC to suspect that a full and accurate disclosure has not been made, HMRC may instead commence a criminal investigation with a view to prosecution. Likewise, if you decide not to make a disclosure or to deny any tax irregularities have occurred, HMRC will commence their own investigation and this could include a criminal investigation with a view to prosecution.

Given the nature of a COP9/CDF investigation and the potential for serious consequences we very strongly recommend that you take expert advice.

How can we help?

Our team at Trident has the experience and skills to advise you in the event that you become the subject of a COP9/CDF investigation.

We understand the COP9/CDF process thoroughly and will spend time with you understanding your precise circumstances before advising you how to proceed.

We can help you work out the tax consequences of what’s happened and how best to provide HMRC with the facts and technical analysis to achieve the best possible outcome for you.

We understand that a COP9/CDF investigation can be stressful, worrying, disruptive and may have serious financial and other consequences. Our calm, professional and focused approach will give you the reassurance and sound advice that you need.

Please call any member of our team if you would like to discuss in confidence any concerns that you have.

HMRC information on CoP 9 can be found here.