Facing a Code of Practice 9 (COP9) investigation or considering a disclosure through the Contractual Disclosure Facility (CDF) can feel complex, time-consuming and highly sensitive. Whether you have received a COP9 offer from HMRC, need support with a disclosure or have concerns about historic tax irregularities, our specialists provide clear, practical advice tailored to your circumstances.
Acting on your behalf, our Tax Disputes and Investigations team understands HMRC's civil fraud investigation process and will guide you through every stage, from assessing your position and preparing disclosures to managing communications and negotiations with HMRC for you. Our goal is simple: to protect your interests, minimise disruption and help reach a successful resolution.
If HMRC invites you to use the Contractual Disclosure Facility (CDF), seek specialist advice immediately. You have 60 days to accept the offer and submit a valid outline disclosure, or reject it if you deny deliberate wrongdoing. Acting quickly gives you time to understand your options, prepare an accurate response and protect your position.
Need to resolve tax irregularities through the CDF?
The Contractual Disclosure Facility (CDF) is part of HMRC’s Code of Practice 9 (COP9) civil fraud investigation process.
The CDF gives individuals suspected of deliberate tax irregularities an opportunity to make a complete, accurate, open and honest disclosure of their tax affairs. In return, HMRC agrees not to open a criminal investigation into the deliberate behaviour disclosed under the contract. This allows taxpayers to work towards a civil settlement with HMRC.
Accepting a COP9 offer means entering into a formal agreement with HMRC and making a full disclosure of all deliberate tax irregularities. HMRC will then investigate the position and seek to agree a civil settlement.
Specialist advice should be sought before responding. Accepting or rejecting a COP9 offer can have significant consequences, and any disclosure must be complete and accurate. An incomplete or misleading disclosure could lead to a criminal investigation.
The CDF is only for deliberate tax wrongdoing. It should not be used to disclose mistakes, careless errors or tax avoidance arrangements that do not involve fraud.
If you do not believe your behaviour was deliberate, or HMRC has not made a COP9 offer, an alternative route such as an HMRC voluntary disclosure may be more appropriate. Our Tax Disputes and Investigations specialists at Crowe UK can assess the circumstances and recommend the right response.
How the Contractual Disclosure Facility works
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HMRC only issues a COP9 letter where it suspects deliberate behaviour has led to an underpayment of tax. The letter offers you the chance to disclose any tax fraud through the CDF and requires a response within a strict 60-day window if you want to engage with the process.
Failure to engage will lead to HMRC undertaking its own civil or criminal investigation, so taking specialist advice as early as possible is vitally important.
A COP9 investigation typically begins with HMRC offering the CDF. If accepted, you must provide an outline of the issues and agree to attend any meetings that HMRC may request, where those issues will be discussed in detail.
Following the meeting, you will usually be asked to commission your advisor to submit a detailed disclosure report explaining any irregularities in your tax affairs and quantifying the tax and interest due. HMRC will review the report and hold detailed discussions with your advisor, in particular to agree the amount of penalties due. Professional representation is essential to ensure you remain compliant with your obligations under the CDF, otherwise, you still risk prosecution.
The period HMRC can investigate depends on the circumstances. In cases involving deliberate behaviour, including those investigated under COP9, HMRC can normally investigate up to 20 years into the past. The exact period will depend on the facts of each case and the nature of any irregularities identified.
Yes. If you are aware of tax irregularities, it is always better to come forward before HMRC starts an investigation.
A voluntary disclosure can demonstrate cooperation and may reduce penalties compared with a disclosure made after HMRC has already begun enquiries. Taking action early can also provide greater control over the process and help resolve matters more efficiently. Specialist advice helps to determine the most appropriate disclosure route for your circumstances.
HMRC receives information from a wide range of sources, including banks, employers, property transactions, overseas tax authorities and online platforms. It also uses sophisticated data analysis tools to identify inconsistencies between tax returns and other information it holds. In many cases, investigations begin because HMRC has identified discrepancies or patterns that suggest income, gains or assets may not have been fully disclosed.
As information-sharing powers continue to expand, those who have not fully declared their income will find it increasingly difficult to stay under HMRC’s radar and so should take steps to regularise their tax affairs immediately.
COP9 is HMRC's most serious civil tax investigation procedure and is used where it suspects deliberate tax fraud. Unlike routine compliance checks or enquiries, COP9 includes the offer of the CDF and requires HMRC and the taxpayer to address potential deliberate behaviour. The investigation is generally wider in scope, more detailed and can cover multiple taxes and many years. The financial and reputational risks are often significantly higher than in standard HMRC enquiries.
Where HMRC identifies unpaid tax, it can charge the tax due, interest and financial penalties. The level of any penalty depends on several factors, including whether the behaviour leading to an underpayment of tax was deliberate, the amount involved and the extent of the taxpayer's cooperation.
If HMRC have prompted a disclosure by offering the CDF and the behaviour is deliberate, the penalties are likely to be between 35% and 70% of the tax. This could rise to 100% of the tax if further steps were taken to conceal the deliberate behaviour by creating fake documents, destroying evidence or falsifying records. If there is underdeclared income or gains relating to overseas assets, penalties could be as high as 200% of the tax.
Making a complete and timely disclosure can significantly reduce penalties, whereas failing to cooperate may lead to much higher charges. In serious cases, penalties can be substantial, making it important to manage the investigation carefully from the outset. If you have received a COP9 letter or are considering a Contractual Disclosure Facility (CDF) disclosure, Crowe UK's Tax Disputes and Investigations specialists can advise on the most appropriate course of action, manage HMRC communications and help minimise penalties through a complete and accurate disclosure.
Anyone with tax irregularities that have been deliberately brought about should seek specialist help as a matter of priority. In these circumstances, the CDF (or Code of Practice 9) is a good place to be, compared to the alternative.
Our experienced and award-winning Tax Disputes and Investigations team can help you navigate the CDF process and ensure you meet your obligations.
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We are an independent tax advisory firm that helps clients navigate HMRC investigations, disclosures and disputes.
If you would prefer to speak to one of our specialists, please call our free confidential consultation line on +44 (0)800 656 9990.
