HMRC Investigation Under Code of Practice 8
A Code of Practice 8 investigation (‘COP8 Investigation’) is commenced where HMRC believes an organisation or business may have deliberately taken part in a tax avoidance or arrangement scheme with the deliberate attempt to pay less than the correct amount or take advantage of a scheme or device to reduce a tax liability.
HMRC Fraud Investigation Service (‘FIS’) may issue a leaflet in situations where criminal misconduct is not suspected and, accordingly, will not be issued where illegal activity amounting to tax fraud is suspected.
The suspicion is simply that all due taxes have not been paid.
John Veale of KANGS comments upon COP8 Investigations procedure.
Conduct of a COP 8 Investigation
General
A COP8 investigation will commence with a letter seeking information (‘Information Notice’) and which will explain which part of a Tax Return HMRC wants to check in order to establish the facts and recover any tax that is due, together with any penalties.
- Such an investigation will not normally be undertaken with a view to criminal prosecution, but this may change if evidence of fraud is found or suspected.
- If evidence of fraud is found or suspected, a criminal investigation may be commenced under Code of Practice 9 (‘COP9 Investigation’).
- Individuals, LLPs, partnerships and limited companies can all be the subject of a COP8 Investigation which may involve a Self-Assessment Tax Return.
- Other departments within HMRC may continue to investigate issues which fall outside the COP 8 Investigation.
Procedure
In the pursuit of co-operation between the parties, HMRC may:
- seek meetings to clarify issues which are not interviews under caution and at which Note will be taken and legal representation is allowed,
- request further information and documentation,
- want to visit business premises,
- request that specific records are retained,
- require the continued submission of tax returns.
Potential Outcome
The COP8 Investigation may:
- find no cause for concern,
- result in tax and penalties to be paid,
- may result in a settlement agreement with HMRC,
- result in the matter being referred to the Tax Tribunal.
Penalties For Non-Cooperation
Penalties may become payable for:
- failing to notify HMRC of a tax liability,
- failing to submit a Tax Return in time, or at all,
- carelessly or deliberately providing an inadequate Tax Return or documentation,
- failing to correct a mistake on a Tax Return within a reasonable time,
- failing to advise of an inadequate assessment or failing to pay tax due in time,
- providing incorrect/false information, during interview or by way of documentation can result in criminal liability.
Who Can I Contact for Advice & Help?
If you or your business are made subject to any form of enquiry by HMRC, please feel free to contact us immediately.
Our experienced Team will assist and provide detailed guidance regarding all aspects of HMRC investigations from onset, to Tax Tribunal or potential criminal proceedings.
Please do not hesitate to contact the team at KANGS using the details below:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through live conferencing or telephone.
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