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Declining the offer of the Code of Practice 9 - 10 reasons why you might reject the offer

Sean Wakeman, Partner, Tax Resolutions
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Individuals who are offered immunity from prosecution for tax fraud should seriously consider the consequences of their responses, even if well intended.

Here are some of our reasons to not accept the Code of Practice 9 (COP9) or the Contractual Disclosure Facility (CDF):

  1. An admission of tax fraud will immediately condemn you to large monetary penalties of a minimum 20% of the tax lost, 35% if you are approached first by HMRC and possibly 45% if irregularities go back more than three years.
  2. You may not have done anything with a deliberate intention (‘mens rea’ or guilty mind) to evade tax.
  3. You may have been acting under the advice of a qualified professional (accountant, Independent Financial Advisor, solicitor, or barrister).
  4. If you work in a regulated sector, you will not want to be ‘named and shamed’ as a tax evader since this could prevent you from working in big cities or other regulated industry.
  5. If you are a professional, needlessly admitting to tax fraud (even though you may not be guilty at all) may put you under an obligation to report yourself to your professional body which may render you liable to other punitive sanctions, including being struck off.
  6. ‘Innocent’ participation in a tax scheme does not equate to tax fraud.
  7. Your business or your company may have been the victims of a fraud perpetrated by a third party of which you are unaware.
  8. Information may have been disclosed to HMRC maliciously by third-parties which is capable of explanation.
  9. You cannot always rely on what your advisor tells you, particularly if they assert that there must be truth in an allegation.
  10. If your name becomes public your personal and business reputation could be left in tatters.

The circumstances of any tax underpayment should always be questioned by an experienced specialist who is skilled in tax investigations work, particularly in COP9 work, if the amounts circumstances are large or heinous.

For further assistance regarding the COP9 or CDF process please contact Sean Wakeman or any member of Crowe’s Tax Resolutions team.

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Sean Wakeman
Sean Wakeman
Partner, Tax Resolutions