Tax Investigations
& COP 9
HMRC is one of the most powerful investigating bodies with 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.
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 to a solicitor is confidential, enjoying the special status of ‘legal professional privilege’.
An accountant cannot provide this protection and, accordingly, we are able to act as a filter between you and HMRC.
We work very closely with Tax Accountants and regularly instruct them to advise on the quantum of any tax assessment served by HMRC.
We can assist with the following types of investigations:
- Initial assessment of tax liability
- COP8
- COP9 and the Contractual Disclosure Facility
- Criminal Investigation and Prosecution
Got a question?
HMRC will initiate a ‘COP8’ investigation if it considers that a 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.
Although HMRC will often confirm at the outset of a COP8 investigation that there is no intention to prosecute the matter on a criminal basis, it is imperative to seek proper and experienced legal advice to avoid incriminating yourself.
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:
- Individuals
- Partnerships
- Companies
- Trusts
All available information will be closely examined including tax returns, accounts and bank statements.
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.
Where tax fraud or tax evasion is suspected and a criminal investigation has not already been commenced, HMRC can initiate an investigation into an individual using the ‘Code of Practice 9 (COP9) investigation of fraud procedure’.
The subject of a COP9 investigation is afforded the opportunity to make 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 considers that:
- A full and frank disclosure has not been made or
- False and/or misleading statements have been made
If HMRC concludes that full disclosure of all deliberate conduct has been made, a criminal investigation will not be pursued and the COP9 procedure will be followed.
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.
If you decide to reject a COP9 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 against you.
If you accept the offer of a COP9, 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.
When the ODF is being completed, for each separate tax loss that arises as a result of any 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 circumstances 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
- A certification confirming that the report is correct and complete
Tax investigations are usually:
- Complex and technical in nature
- Requiring professional attention from a skilled team of solicitors, forensic accountants and barristers
- Protracted and lengthy often spanning a period of several years
Kangs has an experienced team of solicitors accustomed to dealing with serious tax investigations of all types.
We are here to take the strain and worry of a tax investigation off your shoulders.
Kangs is a nationally recognised leader in assisting clients with tax investigations with a proven track record of success. We provide a no obligation initial consultation for all clients.
Our advice is clear and concise. It is based on many years’ experience, and a track record of representing clients nationwide in meetings and interviews with HMRC.
We often represent clients in court or before the Tax Tribunal. Our close working relationships with the best barristers, including Kings Counsel (KC), guarantees clients the very best in representation.
The expert lawyers at Kangs are available to assist you. We can arrange initial consultations in person, by video call or telephone.
Please contact one of our experts listed below or contact us at:
