Code of Practice 8 investigations
HMRC uses Code of Practice 8 (COP8) where it believes that large amounts of tax has been underpaid as a result of complex tax arrangements or tax avoidance schemes which have been implemented by a large number of taxpayers.
These investigations generally do not involve an allegation of suspected serious fraud at the outset. Nonetheless investigations under COP8 should be treated seriously since it is possible that if evidence of fraud is revealed by the investigation, COP9 may be issued or a criminal investigation started.
COP8 investigations often focus on the gathering of large amounts of information so it is vital to understand the limitations of HMRC’s powers and which documents have the protection of privilege. There is no standardised format to a COP8 investigation – unlike COP9.
How can we help?
Our team takes a proactive approach to all investigations and will not only seek to minimise the volume of information presented to HMRC but will also meet with HMRC in the early stages of an enquiry to identify HMRC’s chief concerns and ensure that the enquiry is not extended to a ‘fishing’ expedition.
Although a report is not usually required by HMRC, it is often a good idea to produce the requested information and documents as part of a report, to put the information in context, present the relevant tax technical arguments and, if possible , to circumvent lengthy correspondence.
Our experts have considerable experience of dealing with COP8 investigations, including preparing reports, and will work tirelessly on your behalf to achieve a resolution.
Where HMRC insist on lengthy correspondence or their enquiries are unjustifiable, we can apply to the Tribunal for Closure Notices which are an effective way of bringing drawn out investigations to a close.
Read more about our Tax Investigations expertise.