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COP9 Tax Investigation Support
Specialist COP9 Accountants
If you’re facing a COP9 Tax Investigation, HMRC’s Code of Practice 9 requires a formal response through the Contractual Disclosure Facility (CDF) and meeting tight deadlines. Our team handles the CDF process, prepares accurate disclosures, and works directly with HMRC’s Fraud Investigation Service. We give you clear advice to protect your interests and help you reach a fair settlement..
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When HMRC Uses Code of Practice 9
HMRC starts a COP9 investigation when it suspects deliberate tax fraud that has caused a significant loss of revenue, but chooses to handle the case through civil procedures. Code of Practice 9 is used if HMRC thinks income, gains, or liabilities were knowingly understated. This often involves offshore assets, hidden income, or complex arrangements. The Fraud Investigation Service looks at the evidence before offering the Contractual Disclosure Facility. COP9 usually covers income tax, VAT, PAYE, corporation tax, and cross-border issues. If you receive a formal notice, it will explain HMRC’s concerns and start a strict 60-day deadline to respond.
Legal Framework of Code of Practice 9 and the CDF
Code of Practice 9 is HMRC’s process for handling cases where they suspect deliberate tax fraud. If you admit to deliberate actions and fully disclose all tax issues through the Contractual Disclosure Facility (CDF), HMRC will not prosecute you. This process covers Income Tax, VAT, PAYE, Corporation Tax, and offshore matters. You have 60 days to accept the CDF and send an outline disclosure. Getting specialist advice can help make sure your response is thorough and well-prepared.
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What happens if you reject the Contractual Disclosure Facility under a COP9 tax investigation?
If you turn down the Contractual Disclosure Facility (CDF) during a COP9 tax investigation, you lose the chance to settle things through a clear civil process for deliberate tax fraud. HMRC uses Code of Practice 9 when it thinks there are serious tax problems and offers protection from criminal charges if you fully and honestly admit to any deliberate actions. If you say no to the CDF, HMRC’s Fraud Investigation Service can keep looking into your case and might start a criminal investigation, depending on what evidence they find.
Saying no to the CDF does not mean you will be prosecuted immediately. However, you lose the protection that comes from making a full and voluntary admission. HMRC can use its own records, information from other sources, offshore reports, or your past tax returns to build a case. This means you no longer have a say in how your story is presented.
Before you decide to reject a COP9 offer, it’s important to look at how strong HMRC’s evidence is, which taxes are involved, and what risks come with how your actions are viewed. Our Specialist COP9 tax advisers can help you figure out if accepting the CDF is the right choice for you.
How much detail is needed in the Outline Disclosure during the 60-day COP9 deadline?
Under Code of Practice 9, taxpayers have 60 days to accept the Contractual Disclosure Facility and send in an Outline Disclosure. This Outline Disclosure should list all known deliberate tax issues and confirm that a full report will come later. You do not need exact tax figures yet, but you should clearly explain what happened, which taxes are involved, the years affected, and if offshore income, company structures, or trusts are part of the case.
HMRC expects the Outline Disclosure to be clear and honest. If the disclosure is vague or leaves things out, it can hurt your credibility and may lead to losing CDF protection. At this stage, you are setting out the scope, not final numbers, but you must show that you are making a full and genuine admission of deliberate tax fraud.
If your records are incomplete or complicated, the Outline Disclosure should explain what needs to be reconstructed and give a realistic timeline for the Full Disclosure Report. Leaving out facts, making incomplete admissions, or not mentioning offshore matters can greatly increase your risk in a COP9 tax investigation.
How does HMRC determine whether behaviour is “deliberate” in a Code of Practice 9 investigation?
During a Code of Practice 9 investigation, HMRC looks at whether mistakes or omissions on tax returns were made on purpose or by accident. Deliberate actions usually mean someone chose to understate income, overstate expenses, hide offshore income, or misrepresent financial transactions. To prove intent, HMRC may check adviser emails, internal messages, banking activity, digital accounting records, and how transactions are set up.
How HMRC classifies behaviour—careless, deliberate, or deliberate and concealed—affects both the penalty amount and how far back they can review your taxes. In cases of deliberate tax fraud, HMRC can look back much further than the usual four years. If there is proof that a taxpayer knew about the issue, ignored warnings, or set up arrangements to hide it, HMRC may decide the behaviour was deliberate.
Relying on professional advice can sometimes help reduce the severity of HMRC’s classification, but only if the taxpayer gave the adviser all the correct information. If important details were left out, HMRC may still decide the behaviour was deliberate.
Since how behaviour is classified affects both penalties and the risk of further action, it is important to carry out a technical review early in a COP9 tax investigation. This helps ensure you can present a strong and consistent explanation.
Can HMRC withdraw a COP9 offer after it has been accepted?
Yes, HMRC can withdraw the Contractual Disclosure Facility under Code of Practice 9 if they decide the taxpayer has not given a full, accurate, and complete account of deliberate tax irregularities. This usually happens if important details are left out, assets are hidden, offshore accounts are not reported, or there are differences between financial records and what has been disclosed.
If the CDF is withdrawn, the protection from criminal prosecution that comes with voluntary disclosure may no longer apply. HMRC’s Fraud Investigation Service might then decide whether to continue with a civil resolution or to take a different investigative approach. This can greatly increase your risk.
That’s why the Full Disclosure Report should cover all income sources, companies, trusts, partnerships, and offshore structures in detail. Being open, keeping accurate records, and giving clear explanations are all crucial.
A COP9 tax investigation is more than just an accounting review. It is a formal civil fraud process with legal consequences. Having a professional involved helps make sure your admissions are correct, your calculations are solid, and nothing important is left out that could put your immunity at risk.
What is included in a Full Disclosure Report under a COP9 investigation?
A Full Disclosure Report under Code of Practice 9 gives a complete overview of any deliberate tax irregularities. It usually explains how the issue happened, lists undeclared income or gains, recalculates tax owed for each year, includes interest calculations, and reviews any penalties.
If offshore income, company structures, or special arrangements are involved, the report should clearly show how money moved and name all related entities and accounts. Asset and liability statements help show everything is included. Supporting documents like bank statements, contracts, payroll records, trust deeds, and adviser letters are also needed.
The report ends with signed certificates stating that the disclosure is complete and accurate as far as the taxpayer knows. HMRC looks for clear, well-organized, and well-supported information.
If the disclosure is not well prepared, the COP9 investigation may take longer, HMRC may ask for more information, or it may be harder to reduce penalties. Having experienced COP9 accountants prepare the report helps meet HMRC’s standards and makes it easier to reach a settlement.
How does HMRC calculate penalties in a COP9 deliberate tax fraud investigation?
In a COP9 tax investigation, the penalties depend on how HMRC views your actions and how much you cooperate during the Contractual Disclosure Facility process. If you admit to deliberate tax fraud, the penalties are much higher than for careless errors. HMRC also makes a distinction between “deliberate” actions and “deliberate and concealed” conduct. If you have tried to hide the fraud, the penalties will be even higher.
Three main things affect whether your penalty can be reduced: how quickly you disclose the issue, how much you cooperate, and the quality of the information you provide. If you admit everything early and fully under the CDF, your penalty can be reduced significantly. But if you delay, leave out details, or give inconsistent answers, you may not get much reduction.
In cases of offshore deliberate tax fraud, higher penalty rates may apply. HMRC will also add statutory interest to any unpaid tax. When there are time limits, it is important to have a clear penalty negotiation strategy. Experienced COP9 accountants can help make sure your cooperation is well documented and that your arguments for reducing penalties are strong.
How does HMRC calculate penalties in a COP9 deliberate tax fraud investigation?
In a COP9 tax investigation, the penalties depend on how HMRC views your actions and how much you cooperate during the Contractual Disclosure Facility process. If you admit to deliberate tax fraud, the penalties are much higher than for careless errors. HMRC also makes a distinction between “deliberate” actions and “deliberate and concealed” conduct. If you have tried to hide the fraud, the penalties will be even higher.
Three main things affect whether your penalty can be reduced: how quickly you disclose the issue, how much you cooperate, and the quality of the information you provide. If you admit everything early and fully under the CDF, your penalty can be reduced significantly. But if you delay, leave out details, or give inconsistent answers, you may not get much reduction.
In cases of offshore deliberate tax fraud, higher penalty rates may apply. HMRC will also add statutory interest to any unpaid tax. When there are time limits, it is important to have a clear penalty negotiation strategy. Experienced COP9 accountants can help make sure your cooperation is well documented and that your arguments for reducing penalties are strong.
What happens if you miss the 60-day deadline in a Code of Practice 9 case?
The 60-day deadline to accept the Contractual Disclosure Facility under Code of Practice 9 is strict. If you do not respond within this time and do not have an agreed extension, HMRC may see your offer as rejected. As HMRC explains in their guidance: “If you do not reply within 60 days HMRC will assume that you have chosen not to accept the offer of contract.” This means you lose access to the civil fraud resolution process and the protection from criminal prosecution for what you disclose. The guidance also says: “If you choose not to accept the offer of contract, you lose your opportunity to secure immunity from prosecution for the deliberate conduct you disclose.”
HMRC may give you more time if you have a real and proven reason. Some valid reasons for an extension include:
- Serious illness affecting you or a close family member
- Major difficulty in recovering old or missing financial records
- Recent bereavement of an immediate family member
- Unexpected hospitalisation
- Other exceptional personal circumstances beyond your control
Extensions are not always given, so ask as soon as you can and clearly explain why you need more time.
If you miss the 60-day COP9 deadline and do not engage with HMRC, they may escalate the case. This could mean stronger information-gathering actions or other investigation methods by HMRC’s Fraud Investigation Service. For example, HMRC could carry out an unannounced visit to your business or contact your bank directly to obtain records. These actions make it even more important to respond in time.
It is important to get professional help as soon as you receive a COP9 letter to protect your position. In the first week, your adviser will look at the letter and your case, explain what is at risk, and help you avoid key mistakes in your response. During the first month, your adviser will collect the needed documents, help you draft the Outline Disclosure, and make sure you meet all deadlines. This clear plan helps you get the best result and gives you peace of mind throughout the process.
Can a COP9 tax investigation include offshore income and overseas structures?
Yes, a COP9 tax investigation can include offshore income, overseas bank accounts, trusts, and complex company structures if HMRC thinks you have not disclosed everything. HMRC can get information about offshore matters through international agreements like the Common Reporting Standard and can ask for disclosures under Schedule 36 of the Finance Act 2008. These rules help HMRC find undeclared offshore income through automatic reporting and sharing data with other countries.
When using the Contractual Disclosure Facility, you need to include all deliberate issues, like foreign rental income, overseas dividends, offshore trusts, or hidden foreign accounts, in your disclosure. If you leave out any offshore matters, you could lose the protection the CDF offers.
If HMRC finds deliberate offshore tax fraud, you can face higher penalties and longer investigations. For example, Mr S hid £200,000 in an overseas account and received a 200% tax penalty, along with years of checks. HMRC will ask for a full explanation of your overseas finances, currency exchanges, and who actually owns the assets.
International tax reporting is complicated, and the penalties can be serious. It’s a good idea to work with COP9 accountants who know about offshore disclosure and civil fraud cases. They can help you stay compliant and protected under Code of Practice 9. To get ahead of any issues, book a confidential meeting with a COP9 specialist soon. Getting expert advice early can really improve your outcome.
Can HMRC extend a COP9 investigation beyond the years listed in the opening letter?
Yes. In a Code of Practice 9 investigation, HMRC can look at more tax years than those listed at first if they find signs of deliberate behaviour in other periods. For deliberate tax fraud, HMRC has the power to go back much further than usual—up to 20 years (per Taxes Management Act 1970, section 36(1A)). Simply put, if HMRC suspects fraud, they can review up to 20 years of your past tax returns.
Where patterns of under-declaration, structured concealment, or repeated offshore omissions are identified, HMRC may require disclosure covering all relevant years affected by deliberate conduct. For example, if a taxpayer failed to declare overseas investment income from 2010 to 2015 by systematically omitting interest from offshore accounts, HMRC may expand its scope to cover those years. To put this in practical terms, if £5,000 of offshore interest went undeclared each year over six years, the unpaid tax and related penalties could quickly add up to around £12,000 or more. This shows how potential costs can escalate over multiple years. The Full Disclosure Report must therefore take a comprehensive approach rather than limiting review strictly to the years listed initially.
Giving a full disclosure for all relevant years helps you avoid unexpected penalties and gives you more control over the process. Rather than worrying about what HMRC might find later, you can have peace of mind and make sure you are protected under the CDF, which helps the investigation end more smoothly. Looking back at your records in advance also lowers the risk of future disputes or surprise bills, so you can feel more certain as your case is resolved.
Managing the scope carefully is important in COP9 tax investigations to make sure your disclosure is complete but also reasonable. As a first step, prepare an initial scoping memo within 30 days of getting the COP9 opening letter. To help make this process easier, use the checklist below as a guide for your memo: Identify all potentially relevant tax periods that could be within HMRC’s scope, Gather sources of evidence and documentation relating to the identified periods, Flag any high-risk items or patterns that require more detailed review.
Using this checklist will help you identify the right periods, focus on important areas, and set up a compliant response from the start.
How does specialist representation influence the outcome of a COP9 civil fraud case?
Specialist representation in a COP9 tax investigation significantly influences both procedural control and financial outcome. Code of Practice 9 cases involve deliberate tax fraud allegations, strict contractual obligations under the CDF, behavioural classification, and high financial exposure.
Experienced COP9 accountants handle all communication with HMRC’s Fraud Investigation Service, keep track of deadlines, and make sure the Outline Disclosure is set out correctly. They also prepare the Full Disclosure Report with accurate figures and supporting documents. For example, in a recent case, a client who sent in a well-prepared Outline Disclosure early had their penalties reduced from 55 percent to 30 percent because everything was presented clearly and negotiations were timely. COP9 specialists also work to lower penalty percentages, explain any factors that could reduce penalties, and make sure the story of what happened is clear and legally sound.
Having a professional oversee the process lowers the chance of making mistakes, missing information, or saying things that could risk your protection from prosecution. This helps keep you safe from criminal charges. It also makes settlement talks go more smoothly by providing clear numbers and explanations, which can lead to a better and faster outcome.
In cases of deliberate tax fraud under Code of Practice 9, taking the right steps from the start can lower your risk, help keep the case civil instead of criminal, and speed up a fair settlement.