Once a recipient of a COP9 letter has had chance to review the Code of Practice guide and reflect on previous conduct with an experienced tax adviser, if there is an acceptance of deliberate conduct, the best option will likely be to accept HMRC’s offer of entering into the contractual arrangement.
Providing that the requirements of the contractual agreement are met, this will ensure immunity from prosecution.
To accept HMRC’s offer, the suspect must:
- Be comprehensive, open and honest about deliberate conduct contributing to the loss of tax;
- Sign and date the attached acceptance form; and,
- Offer a valid Outline Disclosure within 60-days of the HMRC COP9 letter.
Following an acceptance, HMRC will test the outline disclosure against the information it has gathered throughout its investigation and has contributed to its decision of suspecting tax fraud. HMRC will then decide to:
- Reject the acceptance of the contractual agreement on the basis that the Outline Disclosure is incomplete, false or misleading; Or,
- Accept the acceptance of the contractual agreement on the basis that the Outline Disclosure is complete.
Where HMRC rejects any acceptance on the basis that the Outline Disclosure is incomplete, false or misleading, HMRC may then undertake a civil or criminal investigation into any deliberate conduct. This could result in HMRC seeking to bring a prosecution.
Where HMRC accepts your Outline Disclosure, you will enter the COP9 process and move towards providing a detailed disclosure in relation to your deliberate conduct. This process requires:
- Full acceptance of deliberate conduct;
- Often one or more face-to-face meetings with HMRC;
- Submission of evidence, such as bank statements;
- Full disclosure of any (non-deliberate) irregularities;
- Assurances on change of behaviour;
- Payment of tax, interest and penalties; and
- Statement confirming you have made full disclosure
If you have any queries regarding COP9, or any other investigation matters, then please do not hesitate to get in touch.