Facing an HMRC investigation conducted under COP8 can be a challenging and daunting experience.
The complex nature of such investigations requires a thorough understanding of COP8 procedures and the ability to effectively manage the process. However, rest assured that you don’t have to navigate this alone.
Our team of experienced professionals is here to offer you the guidance and support you need during this crucial time.
With our extensive knowledge of COP8 and its intricacies, we can help you navigate the investigation, ensure your rights are protected, and work towards a favorable resolution.
Trust us to handle the complexities while keeping your best interests at the forefront
What is Code of Practice 8
HMRC’s Fraud Investigation Service (FIS) diligently initiates COP8 tax investigations when there is a suspicion of underpaid tax arising from intricate tax arrangements or structures. Renowned as HMRC’s premier investigative body, FIS officers possess exceptional expertise in scrutinizing your tax matters and pursuing the recovery of tax, interest, and penalties. Given the formidable nature of their operations, it becomes imperative to engage in specialized representation, enabling effective communication and strategic handling of the situation.
While the majority of HMRC inquiries tend to revolve around a single tax year, COP8 investigations often extend their scope to encompass historical periods and encompass both personal (including familial) and business tax affairs. Drawing from our extensive experience, COP8 examinations commonly delve into offshore aspects as well, presenting an additional layer of intricacy to be navigated with care.
Why am I being investigated by HMRC
HMRC, being privy to an array of financial information from various domestic and international sources, operates with a comprehensive understanding of your financial landscape. If you find yourself subject to a COP8 investigation, it is likely because HMRC has acquired information indicating that your income or gains may surpass what has been declared to them. HMRC’s primary objective is to assess the accuracy of the information at hand and determine if there have been any instances of undeclared income or gains.
In many instances, concerns raised by HMRC FIS can be adequately addressed and supported with evidence. However, situations may arise where the passage of time or limited evidence can lead HMRC FIS to make unfair assumptions, potentially resulting in the belief that tax and penalties are owed. It becomes crucial to promptly and robustly challenge the validity of these assumptions and the subsequent decisions, as they could lead to the unfair imposition of tax and penalties. Our highly skilled team specializing in Tax Investigations & Dispute Resolution is fully equipped to represent you in challenging these assessments, ensuring your rights are protected throughout the process.
What are HMRC’s powers
In order to ascertain the presence of any underpaid tax and gain insight into the underlying behavior that contributed to such underpayment, HMRC may require specific documentation from you. These requests can sometimes feel burdensome, especially if you lack the necessary knowledge or confidence to effectively challenge HMRC.
Without the right guidance, you might find yourself inadvertently falling victim to what can be likened to a “fishing expedition,” where HMRC takes advantage of your cooperative nature. This can prolong the investigation process and impede its expeditious resolution, ultimately resulting in a more time-consuming endeavor.
What is the difference between COP8 and Code of Practice 9 (COP9)
ithin HMRC’s Fraud Investigation Service (FIS), two distinct Codes of Practice, COP8 and COP9, serve as guiding frameworks. COP9 comes into play when HMRC suspects fraud and offers individuals the opportunity to disclose any “deliberate” errors in exchange for immunity from prosecution.
While COP8 investigations are initially conducted, cases can be transitioned to COP9 if deliberate behavior is suspected or confirmed, providing the taxpayer with the added benefit of immunity from prosecution. Under COP9, individuals have the chance to disclose and report any irregularities they may have. Interestingly, some FIS investigators prefer initiating cases under COP8 as it grants them more control over the investigation process.
In some instances, cases have been opened under COP8 despite the initial suspicion of serious fraud. It is important to note that a common misconception is that individuals under COP8 inquiry can face deliberate penalties and may be subjected to criminal investigation at any time.
If HMRC initiates a COP8 inquiry and you are aware of having submitted false returns, it is highly recommended to apply for voluntary disclosure under COP9. Our team of specialists possesses significant expertise in supporting clients throughout the COP9 disclosure process, ensuring the acceptance of the disclosure by HMRC and the subsequent grant of immunity.
How we can help
When confronted with a COP8 tax investigation, it is crucial to promptly seek specialized advice to navigate the potential challenges and safeguard your best interests, thereby mitigating potential liabilities.
By opting for expert guidance, you can expect the following:
- A comprehensive review of your tax affairs, working closely with you and your professional adviser, ensuring a thorough understanding of the issues and risks at hand.
- Development of a strategic plan to minimize exposure to unnecessary tax, interest, and penalties.
- If a disclosure is required, skillful presentation to HMRC to ensure fair and proportionate treatment.
- Diligent oversight to prevent the unnecessary expansion of HMRC’s investigation.
- Striving for an expedited investigation process, aiming for prompt resolution and the closure of all matters to your satisfaction, while minimizing costs and disruptions.
We provide the specialized support you need, ensuring your interests are protected throughout the investigation.
Conclusion
In conclusion, Code of Practice 8 (COP8) plays a significant role in HMRC’s approach to tax investigations. It focuses on cases where HMRC suspects individuals or businesses of underpaying taxes due to complex tax arrangements or structures. COP8 investigations require careful management and expert guidance to navigate the intricate processes involved. By seeking specialized advice and representation, individuals can effectively respond to HMRC’s requests for documentation, challenge assumptions, and ensure a fair and efficient investigation.
Navigating a COP8 investigation can be challenging, especially considering the potential expansion of the inquiry into historical periods and various tax affairs. It is essential to approach such investigations with a clear understanding of the complexities involved, including the potential involvement of offshore aspects.
Specialist support can help individuals communicate with HMRC, challenge unfair assumptions, and protect their rights throughout the process. Moreover, if an individual knowingly submitted false returns, it is advisable to consider making a voluntary disclosure under COP9, which offers the opportunity for immunity from prosecution.
Ultimately, with the right expertise and guidance, individuals can effectively manage COP8 investigations, minimize potential liabilities, and work towards a satisfactory resolution.
David is a Solicitor and Chartered Tax Advisor. David has many years experience of advising clients on Regulatory Fraud matters, involving the smallest to the very biggest cases.
He regularly lectures to the City of London Police on these and related issues. He regularly advises on Confiscation and other consequences that flow from money laundering offences