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EBTs and Code of Practice 9
We are aware that HMRC has recently started to issue Code of Practice 9 (COP9) investigation letters to participants in certain Employee Benefit Trust or EBTs.
This means that HMRC may suspect clients of fraud, which can include them having deliberately concealed or withheld relevant facts or having misrepresented their tax affairs in some way.
HMRC is offering participants an opportunity to make a full disclosure of all errors in their tax affairs (i.e. not just those relating to the use of the scheme). In return, HMRC will agree not to begin a criminal investigation. If a full disclosure is made, a civil settlement will be agreed.
If clients receive such a letter, they only have 60 days to respond to HMRC’s offer. If they don’t, HMRC could start a criminal investigation.
Clients need to carefully consider and explore all relevant factors before any documents are signed and returned to HMRC.
If you or your clients have any concerns about EBTs and Code of Practice 9 then please get in touch.