Winner of the Legal 500 - 'Criminal, Fraud & Licensing Law Firm of the Year 2019'
Tax Investigations & COP 9 Solicitors
HMRC is one of the most powerful investigating bodies having authority to conduct both civil tax investigations and criminal investigations where it is suspected that tax or duty has been evaded, under-declared or underpaid, or that a tax fraud has taken place.
This firm is ranked in Band 1 nationally by the legal directory, Chambers & Partners, for its work in the field of financial crime and fraud investigations
We are able to represent clients throughout the country in relation to HMRC investigations and prosecutions from our offices in the City of London, Birmingham and Manchester.
It is an outstanding firm in defending financial crime cases
Should I approach Solicitors, Accountants or both?
If you are considering contacting an accountant or a solicitor regarding any tax Investigation, we would advise, initially, to instruct a firm of specialist solicitors.
Any information provided is confidential, enjoying the special status of ‘‘legal professional privilege’.
An accountant cannot provide this protection and, accordingly, we are able to provide a filter and barrier between you and HMRC.
However, it is not our role to advise on financial assessments of tax alleged to be due and we work very closely with Tax Accountants who we are happy to instruct.
The types of investigation we can help with fall into the following categories:
- Initial assessment of tax liability
- COP8
- COP9 and the Contractual Disclosure Facility
- Criminal Investigation and Prosecution
Appealing Disputed Assessments
If an assessment has been issued by HMRC with which you disagree, it is possible to appeal the same before a Tax Tribunal.
An appeal has to be lodged with the First Tier Tribunal within thirty days and, accordingly, speed is essential.
The First Tier Tribunal is responsible for handling appeals against decisions made by HMRC on the following:
| Income Tax | PAYE tax |
| Corporation Tax | Capital Gains Tax |
| National Insurance Contributions | Statutory Sick Pay |
| Statutory Maternity Pay | Inheritance Tax |
| VAT | Excise duty |
| Customs duty |
Tribunal Procedure
The Tribunal is a court of law which examines the evidence presented to it upon an appeal and upon which the Judge will reach his decision on the balance of probabilities, having regard to all the circumstances.
Code of Practice 8
If HMRC believes that large amounts of tax has been underpaid as a result of complex tax arrangements or tax avoidance schemes which have been implemented by a large number of taxpayers then they will initiate a ‘COP8’ enquiry.
Although HMRC state that they commence these investigations without intent to prosecute, it is imperative to seek proper and experienced legal advice to avoid incriminating yourself.
The Procedure | Code of Practice 8
The investigation is normally conducted by the Fraud and Bespoke Avoidance section of the Special Directorate of HMRC, which, if there is suspicion of a serious tax loss to HMRC, will investigate the affairs of:
1. Individuals
2. Partnerships
3. Companies
4. Trusts
All available information will be closely examined including tax returns, accounts and bank statements, for example.
During the course of the investigation you may be subjected to meetings with HMRC and/or visits from HMRC to your business premises to examine your business and private financial records.
Particularly active in high value financial fraud cases, with notable expertise in ‘boiler room’ cases
Frequently represents high-profile individuals
Recognised for astute command of financial crime
Renowned for its white-collar crime and fraud practice
Often instructed by senior legal, accounting and financial services professionals
Outstanding financial crime defence practice
Offers expertise in a broad range of white-collar criminal matters and attracts a variety of high-profile clients from around the country
Kangs Solicitors is in the highest tier of firms
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Code of Practice 9 | Contractual Disclosure Facility
Where a criminal investigation has not already commenced, HMRC may decide to initiate an investigation into an individual using the Code of Practice 9 (COP9) investigation of fraud procedure when tax fraud/tax evasion is suspected.
The recipient of COP9 is given the opportunity to make a complete and accurate disclosure of all deliberate and non-deliberate conduct that has led to irregularities in their tax affairs.
This is completed by way of a contractual arrangement called a Contractual Disclosure Facility (CDF).
However, HMRC may commence a criminal investigation if it is felt that:
- a full and frank disclosure has not been made or
- it is considered that false and/or misleading statements have been made
- in exchange for COP9, if HMRC concludes that full disclosure of all deliberate conduct has ben made, a criminal investigation will not be pursued.
HMRC will not normally disclose any specific suspicions but will seek voluntary disclosure and it is crucial that specialist advice is taken in order to protect yourself against incrimination.
COP9 | What are my options and what are the risks?
If you decide to reject a COP 9 offer then you will not be bound by the terms of a CDF but you may be at risk of HMRC pursuing a criminal investigation.
If you accept the offer, you will be required to accurately complete and return an Outline Disclosure Form (ODF).
If the ODF is not fully completed, HMRC will not be bound to comply with the CDF and may initiate a criminal investigation.
COP9 | What are my obligations if I accept? | Outline and Full Disclosure to HMRC
When the ODF is being completed, for each separate tax loss that arose as a result of your deliberate conduct, you will need to explain:
- what you did
- how you did it
- the involvement of other people and entities
- how you benefited from the deliberate conduct
In some instances you may be asked to provide a Disclosure Report which will require:
- a brief business history
- a description of all tax irregularities (including any that were brought about by non-deliberate conduct)
- quantification of all the irregularities
- information to show how you quantified the irregularities
- summaries of tax and/or duties, interest and penalties due
- a reconciliation of your irregularities figure with the summary of tax and/or duties
- a certified statement of worldwide assets and liabilities
- certificates of bank accounts and credit cards you operated
You will also be expected to certify that the report is correct and complete.
How do I approach a Tax Investigation?
Tax investigations are normally of a complex and technical nature requiring professional attention sometimes over a period of several years.
Kangs Solicitors have an experienced team of solicitors accustomed to dealing with serious tax investigations of all types.
Our Team of Tax Lawyers is here to assist you and can be contacted through any of the following:
Useful Links
HMRC documents, on both COP8 and COP9, which have been considered by us, can be found using the following links:
Birmingham
2 Wake Green Road, Moseley
Birmingham, B13 9EZ
0121 449 9888
London
9 Carmelite Street, City of London
London, EC4Y 0DR
020 7936 6396
Manchester
76 King Street
Manchester, M2 4NH