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Civil Investigation of Fraud, Code of Practice 9 (COP9) – Civil Investigation of Fraud Teams
HM Revenue & Customs (HMRC) believes that over 1.5 million individuals and some 300,000 businesses are not paying the correct amount of tax due to fraud, evasion and/or criminal attack. Criminal investigations are resource intensive, expensive and time consuming so HMRC's priority in recent years has been to tackle tax fraud (or non-compliance (including the hidden economy)) by way of civil investigations and various disclosure facilities and campaigns.
On this page:
Who undertakes COP9 investigations?
The Local Compliance and National Compliance directorates have Civil Investigation of Fraud teams (CIF). They are one of the few offices authorised to undertake Code of Practice 9 (COP9) investigations. Other offices include HMRC Specialist Investigations (SI) Fraud and Avoidance and the Criminal Taxes Unit (Civil).
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What is a COP9 investigation?
The Civil Investigation of Fraud (CIF) procedure was introduced in September 2005 to allow HMRC to consistently handle both direct tax and indirect tax cases involving suspected serious fraud. The aim of the CIF procedure is to investigate serious tax, VAT and/or duty fraud and punish evaders by imposing potentially significant financial penalties. It is an important weapon in HMRC's armoury for tackling fraud and improving tax compliance..
The CIF team will initially write to a taxpayer to advise them that they are suspected to serious tax fraud. The taxpayer is issued with a copy of COP9 and invited to attend a meeting under the CIF procedure. The letter does not, however, confirm the information on which HMRC's suspicions of fraud are based.
At an 'opening meeting' with the CIF team, the taxpayer is invited to make a full disclosure of all tax/VAT/duty irregularities in their personal or business affairs and to co-operate with the COP9 investigation. The Investigator will ask the taxpayer to answer six direct tax questions and, if relevant, four indirect tax questions. These require 'yes' or 'no' answers. False statements may result in a criminal investigation.
This is the taxpayer's only opportunity under COP9 to secure the maximum benefit from making a full and complete disclosure. The CIF team does not divulge the evidence that it holds to suspect a taxpayer of having committed serious tax fraud. Instead, the onus is on the taxpayer to make an unprompted disclosure.
If, at the opening meeting, the taxpayer confirms that there are irregularities in his/her personal or business tax/VAT/duty affairs then the Investigator will ask for brief details of the disclosure and then invite the taxpayer to commission a report to fully detail the nature, extent and reason for the irregularities, together with supporting evidence. The CIF team will test that disclosure against the information it holds, before seeking to agree the amount of additional tax, interest and penalties due. The taxpayer will be encouraged to make payments on account of the potential liability during the COP9 investigation.
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What taxes and duties does COP9 cover?
COP9 covers direct taxes, including Income Tax, Corporation Tax, Capital Gains Tax, Inheritance Tax and National Insurance Contributions, VAT and Excise and Customs duties.
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Can a taxpayer choose not to co-operate?
The COP9 procedure is voluntary, but an investigation will be undertaken with or without a taxpayer's co-operation. If a taxpayer does co-operate, the investigation will proceed more quickly, efficiently and advantageously for both parties than if a taxpayer refuses to co-operate.
If a taxpayer decides not to co-operate with HMRC, SI will conduct a thorough investigation of the taxpayer's tax affairs. The lack of co-operation will be taken in account when determining the level of any penalties due. Any penalties charged by HMRC are likely to be significantly less in a case with co-operation that one without.
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Can I be prosecuted under a COP9 investigation?
HMRC reserves complete discretion to pursue a criminal investigation. However, where HMRC decides to investigate using the COP9 procedure it will not seek a prosecution for the tax fraud which is the subject of that investigation. Instead, the taxpayer is given an opportunity to make a full and complete disclosure of all irregularities in their tax/VAT/duty affairs. However, if materially false statements are subsequently made or materially false documents are provided during a COP9 investigation, HMRC may conduct a criminal investigation with a view to a prosecution of that conduct.
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What should I do if CIF investigates me under COP9?
The CIF procedure is only used where HMRC suspects that significant amounts of tax are either at risk or might be (or have been) lost/unpaid. Cases are carefully reviewed for investigation under the CIF procedure and the seriousness of a CIF investigation should not be under-estimated. You need expert, specialist help to best protect you and your business interests.
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I've been accused of serious fraud under COP9 but have done nothing wrong?
HMRC does occasionally 'get it wrong' or interpret information/facts incorrectly. Taxpayers can, through no fault of their own, find themselves wrongly accused of serious fraud. In such circumstances, our expert help is essential to robustly defend our client against the allegations made by HMRC. Our aim is to persuade HMRC that it is wrong as quickly as possible.
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How can OneE TDI help?
At the core of OneE TDI is a highly experienced team specialising in all areas of tax dispute and tax investigation work. We are former HMRC SI inspectors/investigators – so we know how SI/CIF thinks! We are constantly dealing with SI/CIF inspectors/investigators so we have up to date insights into current SI/CIF practice and policy.
We offer confidential, non-judgemental advice to best defend our clients and have a proven track record in successfully managing all contentious tax matters. We provide a comprehensive service to accountancy and legal practitioners and their clients. Our advice saves our clients time and money and helps reduce their potential exposure to tax, interest and penalties.
Putting it simply, we take control of and manage all parts of a SI/CIF investigation so that our clients can get on with their life and their business. What price peace of mind?
Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service.
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How can I contact OneE TDI?
If you would like a free, no obligation discussion with us please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below.
Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters.
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Civil Investigation of Fraud