If you receive a notice of COP9 investigation through the post, you might have some questions, such as: what is COP9? What does a COP9 investigation involve? And what should I do if I receive a COP9 letter? Where can I get HMRC COP9 guidance from?
As Tax solicitors, COP9 investigations are our area of expertise. We’ve provided some guidance on COP9 investigations below. However, we would like to emphasise that a COP9 investigation is a serious matter. If you receive a COP9 notice, please contact us now for legal advice.
What is a COP9?
‘COP9’ stands for Code of Practice 9. It is a set of rules which enable HMRC to pursue a civil investigation into a taxpayer’s conduct. This course of action is taken if HMRC believes you are guilty of tax fraud.
COP9 provides you with the opportunity to admit your wrongdoing and pay the penalty. You are therefore invited to co-operate with HMRC by providing details of your fraudulent behaviour. If you accept this offer, you enter into a process called the Contractual Disclosure Facility (CDF). In return, you enjoy immunity from criminal prosecution.
What is Tax fraud?
Tax fraud means that you have behaved dishonestly with the intention of bringing about a loss of tax. The key word here is ‘intention’. It does not matter whether you actually saved money or benefitted in any way. If you sought to obtain a tax advantage through dishonesty, it amounts to tax fraud.
What does a COP9 Investigation involve?
If HMRC identifies large irregularities in your tax payments, you will receive a notice of COP9 investigation. You will be asked to either accept the allegations or deny them. You have 60 days to respond, or HMRC will assume you have rejected the offer.
If you accept, you will begin the Contractual Disclosure Facility process. This varies according to the complexity of the case, but typically involves:
- Outline disclosure – you respond to HMRC’s initial letter within 60 days, accepting the CDF offer and providing an outline of your fraudulent behaviour
- Full disclosure – you provide a more detailed report of your tax irregularities
- Certificate of Full Disclosure – you submit a signed and witnessed certificate, stating that the information provided is correct
- Payment of penalties – you pay the penalties which are due. These can be reduced by co-operating with HMRC
However, if you reject the offer of CDF, you need to:
- Return the rejection letter – you complete the rejection letter and return it to HMRC within 60 days. If you do not respond, HMRC will assume you have rejected the offer
- Provide an explanation – explain why you are not guilty of tax fraud, providing any documents that support your claim
- Wait for HMRC’s response – HMRC may accept your explanation. If not, you will either face a criminal or a civil investigation
Receiving a COP9 letter or notice of COP9 Investigation
If you receive a COP9 letter, you have just 60 days to decide what to do. This decision must not be taken lightly. You either enter into a contract with HMRC. Or, you deny the allegations and potentially face either a criminal or civil investigation.
That is why you must speak to our tax solicitors before responding to the COP9 letter. We can discuss your options, give HMRC COP9 Guidance and generally provide expert legal advice. If you agree to the CDF process, we can prepare your Disclosure Report and any other documents required by HMRC. It is important to submit the correct information, or HMRC may accuse you of breaching the terms of the contract – putting you at risk of a criminal investigation.
We advise that you only deny the allegations if you are 100% certain that you are not guilty of tax fraud. If so, we can help you build a case that proves your innocence, and support you through any subsequent investigations.