A fair COP? by Anton Lane, industry recognised specialist dealing with contentious tax issues

In part one of a three-part series, Anton Lane explains how a COP9 disclosure may unfold.

Scott collected the post one day to find a letter from HMRC. It read: “Dear Mr Winton… I am writing to you because I have reason to suspect you have committed tax fraud. I enclose a copy of Code of Practice 9 (COP9).”

The A4 envelope was full of pages. It housed a cover letter and a 10-page document headed ‘Code of Practice 9 – HM Revenue & Customs investigations where we suspect tax fraud’. It also included a second letter headed ‘Contractual Disclosure Facility’ (CDF):

“…In return for you:

  • Making an admission of all losses of tax and duty brought about by your deliberate conduct whether committed by you alone or with others and in whatever capacity
  • Completing the attached ‘Outline Disclosure’ and sending it to us within 60 days of receipt of this offer and to the standard described at section 4 of COP9
  • Co-operating fully with our investigation
  • Making a Formal Disclosure at the appropriate time, as described at section 6 of COP9

The Commissioners of HMRC will not start a criminal investigation into any tax losses brought about by your deliberate conduct disclosed in your Outline Disclosure.

The term ‘deliberate conduct’ means that you knew that an entry or entries included on a tax return and/or in accounts were wrong, but you submitted it/them anyway or that you knew that you had a liability to tax but chose not to tell HMRC at the right time.”

The second letter contained two pages for acceptance and two pages for rejecting the offer of the CDF.

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