Code of Practice (COP) 9 is HMRC’s most severe civil investigation type. How you engage with the process can mean the difference between criminal prosecution or moving forward with a clean slate. Here are our top nine tips to ensure the result is the latter.
1. Do not bury your head in the sand.
The Contractual Disclosure Facility (CDF) offer has a deadline of 60 days which cannot be extended. We cover what the CDF is here.
2. Seek appropriate professional advice!
An experienced COP9 professional adviser is essential. There are fine margins in the investigation which could lead to a criminal prosecution for an incomplete or incorrect disclosure.
3. Be open and honest from the start.
Build a trusting relationship with your adviser and provide as much detail as possible to identify issues to resolve sooner. These issues may otherwise be missed and could ultimately lead to criminal prosecution.
4. Collate information and documents which may be relevant.
Doing so as early as possible will assist greatly with the outline disclosure report (ODR) and CDF reports. This may also help to reduce your adviser’s time and therefore your fees. The ODR needs to contain as much detail as possible about all deliberate and non-deliberate tax irregularities. Correct completion of this document is critical, as only disclosed irregularities will be immune from criminal prosecution.
5. Do not destroy any records or documents.
This impedes the preparation of the ODR, may result in a higher penalty being charged and could lead to criminal prosecution.
6. Prepare for the opening meeting.
A meeting will be scheduled between HMRC, yourself and your advisors. This meeting is in-depth and can last for more than five hours. The meeting can shape HMRC’s perception of your engagement with the process and unanswered questions may lengthen the overall COP9 investigation. Your professional adviser can help you to prepare for possible questions which may be asked.
7. Engage with the preparation of the disclosure report.
Following the meeting, a full disclosure report will be commissioned, in which all irregularities will need to be fully explained with supporting evidence and disclosed to HMRC.
8. Consider how you will fund the settlement.
Whilst a COP9 enquiry can be lengthy, any agreed liabilities need to be settled at the end. Consider your cash flow and asset position early to ensure HMRC do not push for the sale of assets or bankruptcy to fund the settlement. Make payments on account where possible – late payment interest is due on unpaid tax and payments on account will stop further interest accruing. It is also viewed as a positive step by HMRC.
9. Ensure you take appropriate professional advice going forward to get things right.
Following the successful resolution of a COP9 enquiry, you will go forward with a clean slate, however future mistakes will be viewed dimly by HMRC.
COP9 professional advisers
At haysmacintyre, we have a wealth of experience in dealing with COP9 investigations. We have a proven track record in obtaining favourable results for clients, allowing them to draw a line under the matter and move forward without further intrusion from HMRC.
Should you require professional advice, please contact Danielle Ford, Head of Tax Disputes and Resolutions.
