Call us 0333 370 4333

Tax Investigations
& COP 9

Strategic Defence in Tax Investigations
KANGS has considerable experience in advising corporate clients, directors, employees and individuals regarding Code of Practice 9 (COP9), tax investigations and prosecutions conducted by His Majesty’s Revenue and Customs (HMRC).

Recognised as one of the leading law firms in financial fraud by both Chambers UK and the Legal 500, our extensive resources, experience and strategic acumen, means we are well-equipped to provide guidance in the most complex HMRC tax investigations.
Speak to a legal expert

Should I approach Solicitors, Accountants or both?

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

Here is why you can rely on us:

  • Expertise in Tax Law: KANGS has a team of experienced solicitors specialising in both civil and criminal tax litigation, ensuring knowledgeable and comprehensive defence strategies.
  • Proven Track Record: We have a history of successfully defending clients in complex tax and COP9 investigations.
  • Specialised COP9 Knowledge: With specific expertise in COP9 investigations, we understand the nuances and intricacies involved, providing clients with tailored and effective defence.
  • Strategic Negotiation: Our team is experienced in negotiating with HMRC, often achieving favourable settlements or reducing penalties for our clients.
  • Confidential and Discreet: Understanding the sensitivity of tax investigations, we ensure all matters are handled with utmost confidentiality and discretion.

Testimonials

There is quality all the way through the firm and the service is excellent. What makes it unique is its ability to draw on a wide variety of disciplines to provide encompassing advice on criminal and civil liability, as well as potential tax issues.
THE LEGAL 500
The team has deep expertise in tax fraud and is known for its work on HM Revenue & Customs cases.
THE LEGAL 500
It has very bright individuals at all levels who know the system inside out.
THE LEGAL 500
KANGS Solicitors is rated for the ‘proactive, expert defence’ it provides to executives and high-net-worth individuals.
THE LEGAL 500
Often instructed by senior legal, accounting and financial services professionals.
CHAMBERS UK
Noted expertise in HM Revenue & Customs cases.
CHAMBERS UK
KANGS is in the highest tier of firms. Frequently represents high-profile individuals.
CHAMBERS UK
They’re real experts in the field and they have a proven track record.
CHAMBERS UK

Got a question?

Can't find what you need? Get in touch with our experienced team, who are happy to answer any questions you have. Call us on 0333 370 4333.

How can KANGS help?

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.

Contact KANGS

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:

E: info@kangssolicitors.co.uk

T: 0333 370 4333

 

What is a COP9 & a Contractual Disclosure Facility?

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.

What are my options with a COP9 and what are the risks?

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.

What are my obligations if I accept a COP9?

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

What is a COP8 (Code of Practice 8) Investigation?

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.

What is the COP8 Procedure?

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.

How do I approach a Tax Investigation?

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.

When might I become subject to a HMRC tax investigation?

HMRC investigations are expensive and time consuming for both business owners and HMRC.

It is impossible to completely eliminate the likelihood of a tax investigation and you may become subject to an investigation even where there has been no wrongdoing as HMRC occasionally conducts random audits and investigations.

However, limiting the possibility of an investigation may be achieved by avoiding the following circumstances which frequently attract the attention of HMRC:

  • a ‘tip-off’ to HMRC by a third-party,
  • mistakes appearing on declared returns,
  • noticeably large fluctuations in margins,
  • conspicuous lack of profitability for long periods,
  • inconsistent trading figures when compared with industry standards,
  • omission of standard items such as PAYE.

How far back can HMRC investigate?

The period of time that may be considered depends on the circumstances of the investigation.

Where there is suspicion of an innocent error, the investigation period is four years.

In circumstances where mistakes/errors are considered careless or negligent, HMRC investigation period is six years.

In the event of suspicion of fraud and or tax evasion, an investigation period of twenty years is permitted.

However, at any stage of an investigation, HMRC may change its stance when the situation under review is more serious than originally anticipated, at which time the investigation period can be extended.

How long do HMRC tax investigations take?

The period will range from a few months to many years depending on the scope and difficulty of the investigation, the volume of information and documents to be collated and examined and whether any foreign Jurisdictions are involved.

Investigations are regularly time consuming, technical in nature, worrying in the event of important missing vital documents and contentious where it appears that HMRC Officers are crossing the boundaries of their statutory powers.

Having the support and guidance of an experienced legal team will be essential to tackle these issues and may result in an earlier resolution than may otherwise have been the case.

How does HMRC collect money owed?

Commonly used mechanisms by HMRC to recover tax money owed are issuing Tax Assessments, entering Payment Agreements and applying penalties and interest.

HMRC relies on various Statutes when conducting investigations, enforcing debt collection and punishing those defaulting in respect of tax liabilities including:

  • Proceeds of Crime Act 2002
  • Director’s Disqualification Act 1986
  • VAT Act 1996
  • Insolvency Act 1986
  • Economic Crime Acts 2022 and 2023.

Possible outcomes of HMRC tax investigations, include pursuing:

  • Penalties and interest
  • Account Freezing Orders.
  • Seizure of Goods
  • Confiscation Orders
  • Forfeiture Orders
  • Director’s Disqualification
  • Insolvency Proceedings
  • Winding-up proceedings.

Latest News & Insights

Serious Fraud, Tax & HMRC
A Tronc Scheme is an organised payment arrangement that allows businesses to fairly distribute tips, gratuities and service charges received from customers to their staff through payroll, without incurring National Insurance contributions for either employers or employees. A Tronc Scheme is usually operated to ensure that qualifying members of staff, including those who would not […]
19/07/24
Serious Fraud, Tax & HMRC
The HMRC's Let Property Campaign offers landlords renting out residential property in the UK and abroad a chance to settle their tax obligations, getting what HMRC describes as "the best possible terms." This is not unusual, HMRC regularly run ‘Campaigns’ targeting specific areas where it suspects that income is not being declared as required. In […]
08/07/24
Tax & HMRC
We conduct many VAT Appeal cases on behalf of Taxpayers in the First-tier Tax Tribunal (FTT) arising from the fact that HMRC has denied a trader the right to deduct input tax claimed on some of its supplier invoices. The usual basis for this as far as HMRC is concerned is that the trader either […]
27/06/24

Get in touch

Need legal assistance? Contact our experienced team for prompt and professional support.
Old map of Birmingham