Code of Practice 9 enquiries and how we can help
What is Code of Practice 9?
HMRC will initiate an investigation under their Code of Practice 9 (COP9) in cases where they suspect tax fraud. HMRC does not usually disclose what their suspicions are, but you can expect that they will have carried out detailed research before opening the investigation. They will not open investigations under Code of Practice 9 without believing they have good reason to do so.
HMRC will offer the recipient of a COP9 enquiry the opportunity to make a full disclosure of all of the irregularities in their tax affairs. In return for making this full disclosure, HMRC will agree not to prosecute the recipient. This process involves entering into a contract with HMRC under the Contractual Disclosure Facility (CDF).
It is also sometimes appropriate for taxpayers to approach HMRC proactively with a request to enter into a contract under the CDF. However, this requires careful consideration.
It is only possible to enter into a contract under the CDF by admitting to deliberately failing to comply with tax obligations. Put another way, it is necessary to admit to a tax fraud before HMRC will agree to proceed under the terms of the CDF.
The offer from HMRC to make a full disclosure must be responded to within 60 days after receiving their letter. Failure to respond to HMRC within 60 days or failure to provide a full and accurate disclosure once the offer has been accepted can lead to HMRC initiating a criminal investigation.
HMRC strongly advise that an agent or adviser is appointed to assist with the process. A decision to enter into the CDF process is an important one and needs careful consideration. In addition, managing HMRC enquiries under Code of Practice 9 can stressful, intrusive and time consuming.
We have extensive experience of managing these enquiries with sensitivity and discretion and reaching a successful resolution.
How we can help
We can help you understand whether the CDF process is appropriate for your circumstances.
We will be able to deal directly with HMRC on your behalf once we have provided HMRC with your authorisation to do so.
We will work closely with you and your advisers to gather information and ensure that we have a full understanding of your tax affairs.
We can help you prepare an initial disclosure of all of the irregularities of your tax affairs.
We can prepare a report for HMRC as appropriate in order to ensure that they are provided with the information they need as efficiently as possible and to ensure that you have the opportunity to explain matters from your perspective.
We can negotiate with HMRC on your behalf to ensure that any tax, interest and penalty costs are minimised as far as possible.