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Receiving a letter under the Code of Practice 9: our top 10 tips

Sean Wakeman, Partner, Tax Resolutions
08/08/2023
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Any letter issued by HMRC under COP9, otherwise known as the Contractual Disclosure Facility (CDF), will come from the Fraud Investigation Service, a specialist division of HMRC.

What should you do if you receive such a letter?

Our top 10 tips

  1. Take it seriously. The recipient is being ‘accused’ of tax fraud so such a letter should not be taken lightly.
  2. Discuss the letter with a tax investigations specialist who will consider your tax affairs with you and decide best how to respond.
  3. Do not waste time. On receipt you have only 60 days to accept or decline the offer of the CDF and submit an outline disclosure if applicable.
  4. Do not accept the offer of the CDF if you have not done anything deliberately wrong in relation to your tax affairs.
  5. Accept the offer of the CDF if you have done something deliberately otherwise known as tax fraud or tax evasion - it will be your means of obtaining immunity from a criminal prosecution.
  6. In considering whether to accept the offer or not, think laterally about all taxes including income tax, Capital Gains Tax, employment taxes (including subcontractor taxes), corporation taxes and inheritance taxes.
  7. If you have different tax issues to disclose, separate out the deliberate errors from careless or technical oversights before submitting your outline disclosure.
  8. Do not ‘cherry pick’ your disclosures; individuals who are prosecuted tend to be those who decide to disclose some issues but leave out other issues. A partial disclosure is always a bad idea.
  9. Be aware that certain classes of individuals (accountants, solicitors, former HMRC employees, anyone involved in the administration of taxes, celebrities) may not qualify for immunity under the Board of HMRC’s prosecution policies, although the offer of COP9 once issued and accepted, if appropriate, will secure immunity from prosecution.
  10. If you accept the offer of COP9, make a payment of account at the earliest opportunity; a payment to accompany the submission of the outline disclosure is usually a good idea. The figure does not need to be scientific but should be credible (i.e., if liabilities are thought to be in the region of £100,000 then an initial payment on account of £10,000 would seem reasonable) and will be indicative of a willingness to cooperate.

Getting things right at this opening stage is just the start of a complex process, and expert advice will be needed at every turn to ensure that the client emerges from the CDF or COP9 process with nothing worse than payment of the underpaid duties to consider.

For more information, or to discuss your position, please get in touch with Sean Wakeman or your usual Crowe contact.

Insights

Our top tips on how to prepare for attending a Code of Practice 9 meeting with HMRC.
Our top tips on the key points you should consider if you are contacted by the Fraud Investigation Service
Our top tips on how to prepare for attending a Code of Practice 9 meeting with HMRC.
Our top tips on the key points you should consider if you are contacted by the Fraud Investigation Service

Contact us

Sean Wakeman
Sean Wakeman
Partner, Head of Tax Resolutions
London