Fair COP9? Helpline to tackle rise in tax investigations

Tuesday, November 22, 2011 | Posted by: Louisa Naylor
Categories: Personal, Protecting your wealth | Tags: tax, HMRC, advice, investigation, penalties, code of practice, fraud, COP9, Louisa Naylor, tax investigations, civil fraud, Code of Practice 9, enquiry

An increasing number of people with large funds held in offshore accounts are receiving a Code of Practice 9 (COP9) letter through their door as UK tax authorities strive to assess a further £7 billion of evaded taxes by 2014. Grant Thornton’s new tax investigations helpline is a first port of call. Meanwhile, tax manager Louisa Naylor looks at what you should do if you are caught by a tax investigation.

Who is affected by COP9?
HM Revenue and Customs’ (HMRC) reserves its COP 9 procedures for the most serious cases of suspected tax fraud outside of the criminal process.

When HMRC registers a case under COP9, it does so with the expectation that the taxpayer owes at least £75,000 additional liabilities – although a National Audit Office report (PDF) released last December showed that, on average, HMRC yields more than £300,000 from a civil fraud enquiry.

If you have received a letter…
If you have been notified that you are the subject of a COP9 enquiry, you may be distressed and confused. HMRC will not tell you why it is suspicious so it is a good idea to get expert advice to help you establish what, if anything, is wrong.

Whether you have underpaid tax or not, once you are in a COP9 enquiry, you have to review your tax affairs and demonstrate either that there is no problem, or that you have identified and addressed the problem. HMRC may not limit its enquiries under COP9 to just one area of your affairs – the whole of your financial situation could be under scrutiny.

How long does the enquiry last?
With the right advice at the outset, you will be able to answer HMRC’s concerns and work through the process with your adviser in six to 12 months.

Without proper guidance, the enquiry can become prolonged, with some cases lasting several years – for example, we recently settled an enquiry that had been running for more than 10 years when the client approached us. Both HMRC and the client were glad to finally reach a pragmatic solution and close the case.

Wherever you are in the COP9 process, it is never too late to seek professional advice. A specialist in tax investigations may find solutions that previously have been overlooked as the duration and complexity of the case has increased.

Launching our tax investigations helpline
In response to HMRC’s renewed efforts to identify unpaid taxes, we have introduced a helpline for people who need advice about dealing with HMRC where they may have a tax problem.

The number to call for a free initial chat is 0845 869 1142.

Our Tax Investigations team has years of experience in disclosures, defending investigations and disputes with HMRC, so please do get in contact for a confidential discussion if you have any concerns. Or find more information on our Tax Investigations page.

You might also find these posts useful:

* ‘How does HMRC know I have undisclosed income?’
* Will the Swiss tax deal be full of holes?
* About the Liechtenstein Disclosure Facility