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An investigation under Code of Practice 8 (tax avoidance) or Code of Practice 9 (tax fraud) could have serious implications. 

What is a Code of Practice 8 Investigation?

The Fraud Investigations Service (“FIS”) within HMRC issues a tax investigation under Code of Practice 8 (or CoP8) when they suspect a large amount of tax has been underpaid by an individual, partnership, LLP, company or trust.

CoP8 tax investigations usually involve complex technical issues or the use of a tax avoidance scheme or planning arrangement that HMRC does not accept. However, HMRC may still investigate affairs as far back as twenty years.

If further evidence is found, a CoP8 can quickly become a CoP9 investigation if fraud is suspected, which is why it is crucial to seek advice immediately.

What is a Code of Practice 9 Investigation?

HMRC’s FIS issues a tax investigation under Code of Practice 9 (or CoP9) when they suspect serious tax fraud has taken place.

HMRC will give the opportunity (60 days) to make a full disclosure of underpaid tax under the Contractual Disclosure Facility (CDF). Signing this, to fully accept admission of fraud, triggers an agreement that HMRC will not criminally investigate with a view to prosecute.

A CoP9 investigation is extremely high risk and difficult to navigate alone. Failure to provide correct information during this process could result in a full criminal investigation.  

How can Qubic Tax help? 

Qubic Tax has a specialist Tax Enquiry Dispute Resolution team, able to offer expert advice and support in investigations such as the above.

In the course of a CoP8 or CoP9 investigation, our team of tax specialists can help by working alongside existing advisers or taking complete control of the investigation and assisting in the following areas:

  • Arranging meeting with a client's existing advisers;
  • Acting as an experienced liaison between clients and HMRC officers;
  • Negotiating and agreeing on the scope of the enquiry and the timeline with HMRC;
  • Advising both clients and their advisors on strategy in relation to the CoP8/9 investigation;
  • Preparing and submitting responses and/or Disclosure Reports to HMRC;
  • Negotiating the lowest possible tax penalties;
  • Assistance or negotiation of a payment plan with HMRC to suit the client's circumstances;
  • Ensuring a high level of communication at all times;
  • Concluding the enquiry as quickly as possible.

During what could be a particularly stressful time for an individual, Qubic is able to offer support and advice throughout the investigation.

Professional advisers and their clients regularly seek the advice of Qubic Tax about alternative strategies and tactics in dispute situations. Our team includes ex-HMRC Tax Inspectors and Chartered Tax Advisers with decades of experience. We have sound practical experience in handling HMRC tax investigations and all types of enquiries together with appeal hearings at tax tribunals.

Posted: 7th Aug 2019

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