COP9 60 Days Countdown

Before advising a voluntary CDF disclosure to clients, we always conder a few things which may affect the case and tax liability. Any other possibilities which may provide favorable terms other than COP9? For example, if the client is a landlord and is investigated because of undisclosed Rent, we may request HMRC permission to file disclosure under the Let Property Campaign. We advise clients that unless a straightforward case and reporting of undisclosed income and gains is simple, HMRC may wish to meet them to discuss the irregularities, how they originated, and their tax and financial affairs. Clients must account for their assets and liabilities and a variance analysis over the years. 

Once it is established and agreed that the client must file CDF within 60 days, the term 60 days will encompass the whole of the working life, and most of the foundation will be built on the knowledge, evidence, and documents that which client will submit in these 60 days. 

We recommend that our clients participate in meetings and help to consolidate a summary of the questions listed below. These questions will serve as the foundation for our COP9 report. Questions are not delimited in any way to the scope of the investigation but will provide HMRC with an overview of the irregularities, mistakes, and responsible parties.

1. The source of income and gains; why and how was it not disclosed to HMRC.
2. Details of the methods used to hide income and gains and the period in which these actions took place.
3. An estimate of tax will include Income Tax, PAYE, VAT, Corporation Tax, Capital gains Tax, Inheritance Tax, and any other tax not covered under direct or indirect taxes.
4. Details of records available, including books of accounts, Purchase invoices, annual accounts, bank statements, credit card statements, store card statements, personal tax returns, etc.
5. Details of other connected parties, individuals, or corporate bodies in the UK or outside the UK. 
6. Any other details or events which have not been covered but are directly related to taxpayer financial, economic, and business finances. 

Always remember that when you sign the CDF, you accept that your deliberate conduct has brought a loss of tax. However, if the customer feels it was not his fault and circumstances and evidence establish that it was due to honest mistakes or tax evaded due to a technical issue or someone else’s fault that the taxpayer did not know of, a formal letter would be prepared to HMRC to explain the reasons.

During the sixty days, the HMRC will not engage with the taxpayer or their advisors about anything other than essential administrative matters. HMRC will disclose its suspicions or discuss the client’s tax issues once the 60-day response time has passed.

In these 60 days, we meet with clients multiple times to quantify the tax payable, outline the adoption report and calculate any penalties and interests to be added if the client needs time to pay the tax liability. An average meeting lasts four to five hours and is also training for the next stage when HMRC invites the taxpayer for a formal interview.