HMRC Tax Investigation - What You Need To Know?

 HMRC Investigations team start Code Of Practice 9 investigations if they doubt a “serious” tax fraud has been executed by planned activity. COP9 is a civil investigative process used by HMRC where severe tax fraud is doubted whereas they don't want to carry out a criminal investigation. Taxpayers are allowed to make a full discourse beneath a contract named a (CDF) Contractual Disclosure Facility about exemption from illegal prosecution. 

HMRC strongly suggest that you seek to appoint independent proficient advice. Our team of Tax Investigation experts assist you on all matters covered by the COP9. It is crucial that once under revenue investigation Specialist Tax Attorneys are instructed as COP9s can be badly handled by non-specialist accountants.  Our team have wide-ranging knowledge in helping those facing a COP9 investigation whilst assisting to navigate the tough time limitations and strict rules. 

We can assist you by:

• Reviewing the whole matter; 
• Providing specialist guidance throughout the whole investigative process;
• Depicting you in correspondence, consultations and sessions with HMRC;
• Arranging the range of the Disclosure Report; 
• Collating and scheduling all documentation instructed by HMRC, including Outline Disclosure, Full Disclosure and the Disclosure Report; and
• Examining disputed tax assessments and penalties.
  
  

Just call us at 020-8239-4999 for further assistance.

What is a Code of Practice 9 (COP9) investigation?

HMRC will start a COP9 investigation if they have proof that you have or may have executed serious tax fraud. There are 2 options for a taxpayer under a COP9 investigation:

1. Accept the Contractual Disclosure Facility (CDF): in return for immunity from criminal prosecution, a taxpayer is allowed to make an outline disclosure to HMRC setting out all the areas where tax fraud has been carried about in planned manners at the outset. Penalties and interest apply. This offer expires after 60 days. The CDF can also be used when you expect to reveal a tax fraud willingly.
   
   
2. Reject the Contractual Disclosure Facility (CDF): if you do not think that you have carried a loss of tax via intentional manners you can replace a CDF Rejection Letter within 60 days. If HMRC carries on with the investigation and discovers that you have executed fraud, you will receive more increased fines and you could receive a jail verdict.
   
   

NB: the Denial path for taxpayers has been revoked: formerly, a taxpayer could refuse fraud, though would cooperate with HMRC during the investigation. Discarding the Rejection choice conveys if you are subject to a COP9, you have 2 options: accept the CDF or reject the CDF. 

What is serious tax fraud?

In the context of COP9 investigations, fraud is described as “unethical conduct that directed to, or was intended to lead to, the loss of tax”. An individual commits an offence if they are deliberately involved in the fraudulent evasion of tax or duty, by themselves or by another person. 

This includes:

    withholding or hiding relevant truths;

    dying to reveal a tax or burden penalty; or

    faking your tax matters.

It is unrelated to whether you have earned from “deliberate conduct”. Plotted behaviour is described as a taxpayer comprehending that an entry in a tax return was faulty, but they submitted it anyway. Tax fraud cannot be executed accidentally and the CDF is not fair to those desiring to reveal just sloppy mistakes or errors.

Code of Practice 9 contains taxation losses carried via Missing Trader Intra-Community (MTIC) fake and the loss of excise duties through your deliberate behaviour.

What is HMRC Contractual Disclosure Facility?

HMRC will mail an opening letter informing you of their suspicion of tax fraud. This letter will contain a copy of COP9 & the offer of a contract via the CDF. It is crucial to consult Specialist Tax Solicitors as soon as you obtain this communication from HMRC because it is important to respond within 60-as soon as the letter is received. If you don't reply at this time, HMRC will cancel their CDF offer.

What is the result of joining a CDF?

By concatenating the CDF you will confess that tax has stood withheld from HMRC due to your deliberate behaviour. As such, HMRC will be authorised to recover tax, penalties and interest that you bypassed from twenty years to the present.

A CDF signifies that you will be needed to co-operate with HMRC (with the help of Specialist Tax Lawyers), which assures the most amazing likely reductions on any penalties due.

What happens if the Contractual Disclosure Facility is rejected?

HMRC will start its investigations if you sign the CDF Rejection Letter. A Rejection Letter can be used in tribunal or Tax Tribunal proceedings, hence legal advice should be taken before communicating with HMRC.

It is important to consult a Tax Investigation Specialist because even if you plan to accept the CDF, if the Outline Disclosure is wrongly filled in then HMRC will not be bound to follow their side of the contract.