Code of Practice 9

Code of Practice 9 (COP9) is a form of tax investigation opened only when HMRC suspects a substantial loss of tax is the result of fraudulent activity by a taxpayer.

HMRC’s funding to tackle what they see as wide-spread and persistent tax avoidance (and tax evasion) is ever increasing. Politically and ethically, there is pressure to ensure tax compliance.

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An offence is committed if a person is knowingly involved in fraudulently evading tax or duty, either by themselves or by another person. This includes: –

withholding or concealing relevant facts;
failing to disclose a tax or duty liability; or
misrepresenting your tax affairs.

HMRC’s Fraud Investigation Services (FIS) office conducts COP9 investigations, the most serious type of civil investigation. In all COP9 tax investigations, HMRC FIS officers are trained fraud investigators and are not to be underestimated.

At the opening of a COP9 tax investigation, a Contractual Disclosure Facility (CDF) offer is issued. This is to give the opportunity to make a complete and accurate disclosure of all the deliberate and non-deliberate conduct that has led to irregularities in the tax affairs of those under scrutiny.

The Commissioners have the right to initiate a criminal investigation with a view to prosecution in cases where HMRC suspects the recipient failed to reveal all irregularities.

Once a Contractual Disclosure Facility offer has been made and accepted you have 60 days to respond. You will not be prosecuted by HMRC if you disclose your deliberate conduct fully. It is therefore important to take expert advice at an early stage when contacted by HMRC under Code of Practice 9.