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Code of Practice 9 investigations

In cases where a serious tax fraud is suspected, HMRC may decide to investigate using the Code of Practice 9 (COP9) investigation of fraud procedure which incorporates the Contractual Disclosure Facility (CDF). 

Under this code of practice, taxpayers are given the opportunity to make a complete and accurate disclosure of all their deliberate and non-deliberate conduct that has led to irregularities in their tax affairs.

Where it suspects that the recipient has failed to make a full disclosure of all irregularities, HMRC reserves the right to start a criminal investigation with a view to prosecution. However, in exchange for full disclosure of all irregularities, HMRC will not pursue a criminal investigation in relation to the conduct that gave rise to the investigation. 

There is a strictly managed process which involves:

  • Response to the opening letter from HMRC within 60 days, either agreeing to accept the CDF terms and providing an outline disclosure, or denying that tax fraud has been committed; 
  • Providing a full disclosure of any tax irregularities within a set period, including quantification of the tax underpaid;
  • Completion of certificates.

As part of the investigation, the taxpayer may be asked to attend a meeting prior to preparation and submission of the full disclosure report.

If HMRC receives no response to the initial letter, cooperation is withdrawn during the process, or the disclosure made turns out to be significantly incomplete, HMRC may decide to launch a criminal investigation. The CDF can also be used in cases where a taxpayer wishes to disclose a tax fraud voluntarily.

How can we help?

We can assist in the understanding of the CDF process and help in deciding the answer to the all important question of how to respond to the HMRC offer of CDF.   This is a process in respect of which HMRC itself recommends that taxpayers should seek specialist advice.

We can either manage the disclosure process completely or support you and your regular adviser through the process. We can also help you decide whether the CDF is an appropriate route for voluntary disclosure. 

Read more about CDF on Out-Law.com

More about our Tax Investigations expertise.

Key Contacts