1. Fraud Investigation Service

Code of Practice 8 (COP 8) explains how the Fraud Investigation Services (FIS) at HM Revenue and Customs (HMRC) carries out the civil investigations and in some instances where and when the Code of Practice 9 (COP 9) is not used.

2. Introduction

Most Taxpayers pay the right amount of tax, what is due, but some deliberately try to pay less than the correct amount or take advantage of a scheme or device to reduce tax liability, or they have been a victim of bad or ill advice by an unqualified accountant. If HM Revenue & Customs (HMRC) suspect this, HM Revenue & Customs (HMRC) will investigate such a case under Code of Practice 8 (COP 8) to establish the facts for recovering any avoided or unpaid tax, interest, and penalties due but not paid. HM Revenue & Customs (HMRC) will not undertake Code of Practice 8 (COP 8) investigation with a view to criminal prosecution. However, HM Revenue & Customs (HMRC) may take a different approach if they suspect or find evidence of fraud at any time during their investigation. If this is the case, then a simple Code of Practice 8 (COP 8) will change into a Code of Practice 9 (COP 9) investigation. Unlike HM Revenue & Customs (HMRC) 's Code of Practice 9 (COP 9), this is not a criminal investigation, and here they want to give you the benefit of the doubt by offering to tell them the facts or to give the correct information or come clean with what the client knows to their best of knowledge. However, Tax Payers must consider at this stage the HM Revenue & Customs (HMRC), themself may not know all the facts and maybe fishing for information, and the information they hold may be wrong. This is a risk Zero One Consultants will not advise to take, especially if the Tax Payers are in any doubt, even a little bit not sure of their tax affairs, and if there is an issue, the taxpayer is not sure, then they should inform first Zero One Consultants to evaluate the situation then Zero One Consultants may advise the Tax Payers to inform HM Revenue & Customs (HMRC). Zero One Consultants also highly recommends that before you reply, HM Revenue & Customs (HMRC) speak to our qualified team to get our confidential assessment beforehand.

3. HM Revenue & Customs (HMRC) 's ACT

HM Revenue & Customs (HMRC) will investigate any situation where they believe that there may be a significant loss (any amount of tax, interest, or penalties) of the tax. This includes but is not limited to the tax affairs of individuals only but may or will expand to partnerships, limited liability partnerships (LLPs), companies (limited by shares and guarantees), and trusts and covers all the taxes, duties, levies, and contributions for which HM Revenue & Customs (HMRC) is responsible. They may take responsibility for compliance checks started in other parts of HM Revenue & Customs (HMRC) and start their investigations. For example, if HM Revenue & Customs (HMRC) investigation includes an inquiry into a Self Assessment tax return, they may deal with the whole tax return or a specific aspect of it. If their involvement is limited to one aspect of your tax return, another HM Revenue & Customs (HMRC) office will/may deal with the other aspects. In such cases, all HM Revenue & Customs (HMRC) departments will coordinate with each other's work. The taxpayer needs to understand that HM Revenue & Customs (HMRC) has the right to do this, and neither tax professionals nor your representative nor you can stop them from not opening an inquiry into the other parts of your tax return.

4. Confidentiality & HM Revenue & Customs (HMRC) authorities about Data

HM Revenue & Customs (HMRC) does treat taxpayers' tax affairs in the strictest confidence. However, in many and some specific cases, due to the circumstances, HM Revenue & Customs (HMRC) may have to give people information without taxpayer's authority (court of law, HM Revenue & Customs (HMRC) legal teams, etc.). HM Revenue & Customs (HMRC) will not give information about the taxpayer to anyone outside HM Revenue & Customs (HMRC) unless the law allows them. HM Revenue & Customs (HMRC) is also a Data Controller under the General Data Protection Regulation (GDPR), and they must comply with these rules and regulations. HM Revenue & Customs (HMRC) holds information for taxes, tax credits, and other legal functions given to HM Revenue & Customs (HMRC) by Parliament. HM Revenue & Customs (HMRC) uses this information for HM Revenue & Customs (HMRC) 's internal and external functions. Saying this and acknowledging the facts about HM Revenue & Customs (HMRC) 's authority for the usage of data, if you have a data breach by HM Revenue & Customs (HMRC), then HM Revenue & Customs (HMRC) will be equally held responsible as an ordinary data controller.

5. Collecting Information

HM Revenue & Customs (HMRC) will check new information they receive about taxpayers with their existing records. This includes information given by the taxpayer and others, e.g., your accountants, solicitors, other government departments and agencies and overseas tax authorities, trade associations. During their investigation, HM Revenue & Customs (HMRC) will ask third parties for information about you and/or your business. However, HM Revenue & Customs (HMRC) will only ask for the information they need to complete the investigation. If the taxpayer has given HM Revenue & Customs (HMRC) a mandate (authority for a third party to provide them with information), HM Revenue & Customs (HMRC) may use their investigation to get information usually available only to the taxpayer. But HM Revenue & Customs (HMRC) will sometimes use their legal powers whether or not you have given them a mandate. This is because taxpayers do not have to discuss matters before other people, including your business partners or fellow directors. However, discussing issues openly will often help speed up an investigation and reduce costs.

6. Co-operation

The taxpayer must decide whether Tax Payer wants to co-operate with HM Revenue & Customs (HMRC) investigation or not. To make a decision, Tax Payer may want to get help from a professional adviser. More information about co-operation can be found under 'Meetings' and 'Interest and penalties.'

7. Professional Representation

Tax Payers may want to consider appointing a professional adviser, Zero One Consultants, to represent the Tax Payer during HM Revenue & Customs (HMRC) investigation. This is a severe matter for Tax Payers to decide. If you appoint Zero One Consultants as your advisor, we will be with you at all meetings with HM Revenue & Customs (HMRC). In addition, we will correspond with HM Revenue & Customs (HMRC) on Tax Payer's behalf. Zero One Consultants and HM Revenue & Customs (HMRC) will make notes of all meetings, and Zero One Consultants will ask for copies of HM Revenue & Customs (HMRC) notes. Tax Payers may change or stop using an adviser at any time. If this is the case, Tax Payers should give HM Revenue & Customs (HMRC) a notice of the removal of the advisor along with the notification from the advisor. Being your adviser, Zero One Consultants have a right to get all the information and facts from you, Tax Payer, because you are responsible for your tax affairs and the accuracy of any information supplied to HM Revenue & Customs (HMRC). If we deal directly with your adviser, we expect high standards from them. But if there are delays or difficulties we may deal directly with you.

8. Meetings

If Tax Payers decide to co-operate with HM Revenue & Customs (HMRC), Tax Payer's attendance at meetings is an essential part of that co-operation. Meetings give HM Revenue & Customs (HMRC) and the TaxPayers a chance to ask questions and clarify points throughout the investigation. HM Revenue & Customs (HMRC) investigation may take longer if we only contact you by postal letters or emails. HM Revenue & Customs (HMRC) and Zero One Consultants will make a written record of meetings. Also, we can ask HM Revenue & Customs (HMRC) for a copy of their notes. In the meeting, all the notes taken will be signed and endorsed by the TaxPayers and/or HM Revenue & Customs (HMRC) which shows that they accurately reflect what is said, but you do not have to do that as your representative advisor Zero One Consultants will do it for you.

1. We can arrange meetings with you at

1. The office of your adviser
2. Your business premises
3. An HM Revenue & Customs (HMRC) office
4. Your home

You can ask your adviser, Zero One Consultants, to attend these meetings with you to defend your corner.

• Customers With Particular Needs

If anything about Tax Payer's health or personal circumstances may make it difficult for Tax Payer's to deal with this check, please tell the investigating officer or Zero One Consultants. Telling HM Revenue & Customs (HMRC) and Zero One Consultants will help us help Taxpayers most appropriately. For more details, go to Dealing with HMRC if you have additional needs.

1. Keeping you informed

You can ask Zero One Consultants at any time to explain:

1. Your legal rights
2. Why HM Revenue & Customs (HMRC) takes a particular action
3. Taxpayers obligation under the law
4. Taxpayers can ask for these explanations even if HM Revenue & Customs (HMRC) have already given them to you.
5. Zero One Consultants will deal with letters from HM Revenue & Customs (HMRC) promptly.
6. If we cannot do so, we will let you and HM Revenue & Customs (HMRC) know the reason for the delay.

Help from HM Revenue & Customs (HMRC)

9. Visits

We may decide to visit your business premises where you run a business using part of your home. We may visit only those parts used for business purposes. Otherwise, we will not visit your home unless you invite us to. On most occasions, our visit will be to inspect your business records. We may also need to inspect the business premises, business assets, and stock. We will agree on the date and time of any visit with you by mutual agreement. We will give you prior warning of a visit unless there is a clear operational need not to. We will usually tell you in advance how many officers will visit. All our officers carry identification, which you can ask to see. They will only ask you about matters that may be relevant to your tax position.

10. Your Costs

Zero One Consultants will let Tax Payers know how much dealing with HM Revenue & Customs (HMRC) investigations can cost you in time and money, along with an estimate about all the taxes, interest, and penalties. In addition, Zero One Consultants will make sure that HM Revenue & Customs (HMRC) inquiries are reasonable and proportionate to your case.

11. Providing Information

HM Revenue & Customs (HMRC) will ask Tax Payers to provide information and documents for their investigation. HM Revenue & Customs (HMRC) will give Tax Payers a reasonable time to provide any information. However, Zero One Consultants will highly recommend you go through your advisor, so Zero One Consultants can assess the suitability and reliability of the information and document. If Tax Payers think that HM Revenue & Customs (HMRC) have not given Tax Payers enough time, Tax Payers should let Zero One Consultants know as soon as possible so Zero One Consultants can contact HM Revenue & Customs (HMRC) and explain why and how much more time is need. If HM Revenue & Customs (HMRC) can not agree to issue more time, they will explain why and then Zero One Consultants may appeal again for the extension of time. If Tax Payers have difficulty getting the information and documents HM Revenue & Customs (HMRC) ask for, please get in touch with us, Zero One Consultants, straightaway to discuss how we can get it for you or put you in the right direction. Likewise, if Tax Payers are not sure why HM Revenue & Customs (HMRC) is asking for something, please get in touch with Zero One Consultants, and we will explain why HM Revenue & Customs (HMRC) need it. HM Revenue & Customs (HMRC) will use their statutory information powers, if necessary, to approach third parties for more information. If Tax Payers co-operate with HM Revenue & Customs (HMRC) and provide all the information, HM Revenue & Customs (HMRC) may not need to use these formal powers. However, there may be times when HM Revenue & Customs (HMRC) may need to check the accuracy of information provided by the TaxPayers for accuracy and completeness of the information provided by the Tax Payers. Therefore, tax Payers should ensure that any information Tax Payers provide and any answers are correct. If Tax Payers are unsure about any matter, Tax Payers should say so by adding the reason or stating, "this is according to the best of the TaxPayers knowledge and memory." Tax Payer must give HM Revenue & Customs (HMRC) and Zero One Consultant all the relevant facts even if Tax Payers are not sure about the tax consequences of a particular matter. Compliance Checks: Information Notices

12. Records

Tax Payers must keep certain records to help you to complete their tax returns and other tax fillings. Tax Payers can get more information from HM Revenue & Customs (HMRC) website. Please make sure that all the Taxpayers keep all the existing records, including computer records, during HM Revenue & Customs (HMRC) investigation whether or not Tax Payers are required to do so by law. HM Revenue & Customs (HMRC) may ask to see your business and private financial records. HM Revenue & Customs (HMRC) can arrange to examine these at your premises, at the premises of your adviser, or our own office. Where necessary, HM Revenue & Customs (HMRC) may keep original records or copies, for which we will give you a receipt. Tax Payers may ask for the return of any records that HM Revenue & Customs (HMRC) hold if you need them at any time. If HM Revenue & Customs (HMRC) need to keep them, they will give Tax Payers or Zero One Consultants copies of any documents you need; in routine practice, Zero One Consultants will keep a copy of whatever you are submitting to HM Revenue & Customs (HMRC). Zero One Consultants will do this free of charge as a standard practice and keep our records up to date. If your business or personal records do not meet the legal requirements, Zero One Consultants will tell Tax Payers what to do to improve them. For example, if Zero One Consultants consider your accounts or tax returns are inadequate in any way, we will guide you to correct and fix it to reflect the fair and accurate view of your tax affairs. If you are still in doubt about the records you need to keep for the future, you should ask your adviser, Zero One Consultants, for help. Keeping Your Pay & Tax Records

13. False Statements

Tax Payers should make sure that answers given at the meetings, in correspondence, pieces of evidence, proofs, record keeping, and all other types of information they provide to HM Revenue & Customs (HMRC) are correct and complete to the best of their knowledge and belief. If a taxpayer makes a statement they know to be false, HM Revenue & Customs (HMRC) may conduct a criminal investigation leading to prosecution. Zero One Consultants, once appointed, will ensure all the information you provide to the HM Revenue & Customs (HMRC) is up to the highest quality of standards, acceptable in format, quality, and quantity, and is not something that may give a piece of evidence against you.

14. Your Ongoing Compliance Obligations

Tax Payers should continue to submit all due tax returns (all aspects of taxation, SA100, Value Added Tax (VAT), Pay as You Earn (PAYE), Construction Industry Scheme (CIS), CT600 or any other but not limited to these) by the statutory filing dates. Tax Payers should not delay sending their tax returns and related payments to HM Revenue & Customs (HMRC). Tax Payer's ongoing compliance behaviour indicates their willingness to engage with HM Revenue & Customs (HMRC). Zero One Consultants can assure you that if you deal with HM Revenue & Customs (HMRC) in a very positive way and continue to be a law-abiding citizen with a high level of accuracy, completeness, and transparency of your tax returns and information provided, this will result in your best interest.

15. Payment on Account

HM Revenue & Customs (HMRC) will ask you to make a payment on account of any additional liability HM Revenue & Customs (HMRC) thinks is due until the conclusion of the investigation. If Taxpayers make a payment on account, it may help stop late payments interest accruing on the amount owed while under investigation. This will show Tax Payers willingness to settle. HM Revenue & Customs (HMRC) may take swift actions to charge Tax Payers personal or company tax before the end of their investigation if they think that you may not pay any additional tax due. HM Revenue & Customs (HMRC) may also act very aggressively if statutory time limits for assessing are about to expire. With all the concerns of Tax Payers and HM Revenue & Customs (HMRC), Zero One Consultants have a very conservative approach on this issue and will advise the Tax Payers to do put some (fair enough amount) as a deposit, but we may also not be able to fully satisfy the HM Revenue & Customs (HMRC) demand of deposit. Again this is a run-time decision that will be looked at after reviewing few variables.

16. Concluding the Investigation

If Tax Payers think that HM Revenue & Customs (HMRC) should stop their investigation, please tell Zero One Consultants why, provide us with the evidence that we can evaluate, and be in touch with HM Revenue & Customs (HMRC) if you have the proper grounds. If you believe that you have given all the relevant information and HM Revenue & Customs (HMRC) have had enough time to investigate, also let us know, and then we will be in touch with HM Revenue & Customs (HMRC). If HM Revenue & Customs (HMRC) cannot close the investigation, they will explain why, e.g., HM Revenue & Customs (HMRC) may feel it necessary to get more information from third parties. If HM Revenue & Customs (HMRC) investigation finds nothing wrong with Tax Payers' tax affairs, HM Revenue & Customs (HMRC) will let Tax Payers know that HM Revenue & Customs (HMRC) have finished their investigation. If HM Revenue & Customs (HMRC) decide to seek a financial settlement at the end of their investigation, Zero One Consultants will try to agree with them on your behalf and approval. This will cover the amount of tax, duties, interest and penalties HM Revenue & Customs (HMRC) believes that Tax Payers owes, and Zero One Consultants will evaluate that this is the right amount. Tax Payers should ask Zero One Consultants to explain if Tax Payers do not understand any of the figures HM Revenue & Customs (HMRC) propose or Zero One Consultants agrees to them to settle the investigation. If HM Revenue & Customs (HMRC) cannot reach an agreement with you, HM Revenue & Customs (HMRC) have a right to determine the tax, duties, interest, and penalties they consider appropriate through formal assessments. In some instances where HM Revenue & Customs (HMRC) and Tax Payers reach an agreement, HM Revenue & Customs (HMRC) still may need to make formal assessments. HM Revenue & Customs (HMRC) may ask Tax Payers to sign a Certificate of Full Disclosure confirming that you have now declared all your taxable income, gains and other duties. HM Revenue & Customs (HMRC) would not ask you to sign a certificate if the investigation showed nothing wrong. Therefore, you should consider the certificate very carefully before signing it. If you sign a certificate you know to be false, HM Revenue & Customs (HMRC) may conduct a criminal investigation leading to prosecution. Therefore, Tax Payers should always make sure that they understand what, or if anything, was wrong with their accounts or tax returns. Tax Payers should ask Zero One Consultants or their professional adviser what Tax Payers need to do to make sure Tax Payers get all the tax affairs right in the future.

17. Interest and Penalties

HM Revenue & Customs (HMRC) charge statutory interest on any late paid tax. HM Revenue & Customs (HMRC) may also charge a penalty for:

1. Failing to notify us of your liability to a tax
2. Failing to make a return by the statutory filing date or at all
3. Carelessly or deliberately giving us an inaccurate tax return or another specified document
4. Failing to correct, within a reasonable time, a mistake you notice in a tax return
5. Failing to tell us, within a reasonable time, that an estimated assessment to tax is inadequate
6. Failing to pay on time

HM Revenue & Customs (HMRC) calculate penalties following provisions contained in the legislation. These can be reduced for

1. Positive behaviour. When calculating any penalty due, we take into account:
2. How and when you tell us about any offence
3. How and when do you co-operate with us to get things right

You can find more information on our penalties under the old and new regimes in factsheets: Self Assessment and Old Penalty Rules VAT Dishonest Conduct Penalties Penalties for Inaccuracies in Returns and Documents Higher Penalties for Offshore Matters

18. Reviews and Appeals

HM Revenue & Customs (HMRC) decision letter will explain what to do if Tax Payers do not agree with the outcome of the investigation. It will explain how HM Revenue & Customs (HMRC) arrived at a decision and tell Tax Payers about their appeal rights. If Tax Payers disagree with HM Revenue & Customs (HMRC) 's decision, Tax Payers should write and let Zero One Consultants know in 14 days, so within 30 days of the HM Revenue & Customs (HMRC) decision, Zero One Consultants can respond to HM Revenue & Customs (HMRC). This is known as an appeal to HM Revenue & Customs (HMRC). Tax Payers can ask for your case to be:

1. Reviewed by a different officer from the one who made the decision
2. Heard by an independent tax tribunal

• If Tax Payers want to have the case reviewed, Tax Payers will still be able to appeal to the tribunal if Tax Payers disagree with the independent case officer.

Tax Payers can find out more about reviews and how to appeal:

1. By reading the notes with the assessment
2. In our factsheet, 'hmrc1: hm revenue and customs decisions – what to do if you disagree.'
3. By asking the investigating officer to explain the process to you
4. To find more information about the tribunals' service.

HMRC1: HM Revenue and Customs decisions – what to do if you disagree.' Tribunals Service.

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