Have You Recieved a CoP9 from HMRC?


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What is Code of Practice 9?

If you have received Code of Practice 9/Contractual Disclosure Facility ("CoP9") from HMRC you are being given notice that the taxman suspects you of committing tax fraud/tax evasion. This is HMRCs most serious civil investigation and so getting specialist advice at any early stage is critical in ensuring that the risks involved in this process are properly managed.

While there is a risk of criminal investigation this can be negated by managing the CoP9 process properly from the very start. Having on side a specialist experienced in these matters can help to ensure that you make the right decisions and properly understand the risks and consequences.

HMRC

What Should I Do If I Receive a CoP9?

Once you have received the CoP9, we would strongly recommend getting specialist advice as early as possible. It can be easy to ignore HMRCs letter and hope it goes away, but this is not a sensible option. Decisions on the most appropriate option and, if necessary, initial disclosure to HMRC will need to be made within 60 days of receipt of the Code of Practice. So, it is essential that you get the help of a specialist advisor from the outset.

What Will the Process Look Like?

  • In order to put together a credible outline disclosure your advisor will need to understand the tax inspector’s likely questions and be able to proactively deal with them. This ensures that the tax inspector’s reaction and next steps are properly influenced and managed.
  • Once your initial disclosure is submitted, the tax inspector will check your information against the information held on file, together with the evidence which led to the original decision to issue the CoP9.
  • If the inspector is satisfied that you have disclosed all material tax issues, you will be notified of this in writing. If HMRC is unable to accept your initial disclosure, it is likely that you will also be notified of this in writing. If the inspector is unable to accept your disclosure, the prospect of HMRC commencing its own investigation - on either a civil or criminal basis - increases significantly.
  • If the initial disclosure is accepted, the next stage is for your advisor to prepare a disclosure report on your behalf. This should include details of why, how and when the irregularities arose, the amounts involved, and provide comfort to HMRC that there are no further issues which need to be disclosed.
  • Preparing a report that is credible, and capable of standing up to HMRC scrutiny, and at the same time seeks to mitigate - where appropriate - the tax issues, can be a difficult balance. Getting this right requires the ability to accurately predict HMRC’s questions and areas of review, and proactively respond to them in the final document. If the submitted disclosure report is credible and provides the tax inspector with sufficient comfort that it is accurate and complete, it should be accepted with little further review.
  • The final stage is to negotiate the amount to be paid to HMRC in settlement. Most settlements will include the additional tax due, interest (on the additional tax due), and a penalty. The penalty is likely to make up a significant part of the final amount payable to HMRC. However, this is where the benefits of providing a full initial disclosure and submitting a credible and supportable disclosure report can pay dividends, as it can help to significantly reduce the penalty being sought by HMRC. Understanding, in detail, HMRC’s assessing powers and negotiation parameters is key in ensuring you are able to achieve the best possible outcome.
  • The nature and amount of the penalty also has much wider, non-financial, consequences. HMRC now has the ability to publicly ‘name and shame’ tax-payers in certain circumstances. These circumstances include situations where there has been lack of cooperation with the investigation. So, as well as reducing the amount payable, making sure that any penalty is mitigated as far as possible is also crucial in ensuring that the prospect of being ‘named and shamed’ is avoided.
  • Ultimately, the final amount payable to HMRC is down to negotiation, and so, you need to be comfortable that you have an advisor on your side who is experienced and able to effectively negotiate with HMRC.

We understand that receiving a CoP9 can be extremely stressful but try not to panic. If the situation is handled correctly from the start, you will be able to deal with all of the issues presented and resolve any historical tax issues you may have. Once resolved, you can come out the other side with a "clean slate".

How Can Pannu Tax Help?

We have over 100 years’ combined experience in successfully managing all manner of tax investigations, disputes and enquiries. We have a 100% record in ensuring that our clients achieve a civil settlement in CoP9 investigations on the best possible terms.

You will be represented by former tax inspectors who have dealt with some of the most complex and high profile HMRC investigations in the UK, but at an affordable price. They are recognised as some of the UKs leading tax investigation specialists and are trained negotiators and accredited mediators.

How can we help?

For a free, confidential and no obligation discussion call us on 0800 246 5915 or email us direct at info@pannutax.co.uk