If you have any problems with Tax Investigations, Code of Practice 9 (COP 9), HM Revenue & Customs (HMRC) civil or criminal prosecutions and you also need forensic accounts or expert opinion in tribunal or court, or you may need representations in tax tribunals, then Zero One Consultants may have a solution for you.
If you receive a Code of Practice 9 (COP 9) letter from HM Revenue & Customs (HMRC). If you have any doubt that you have made a genuine mistake in your tax affairs or if you think, that there is something you need to disclose to HM Revenue & Customs (HMRC) which was omitted in the first place. You have been subject to malpractice of your accountant/s or any other reason which may cause an investigation from HM Revenue & Customs (HMRC) either civil or criminal, Zero One Consultants advises you, not to ignore the matter, instead take the matter with immediate attention. Zero One Consultants strongly recommends you to see an expert like Zero One Consultants it self for your forensic accounts needs or an expert opinion on the matter as soon as possible. This is more important if you are the recipient (tax payer/suspect) of Code of Practice 9 (COP 9) letter, then you may have only limited number of days to react. Every day is counted, and 60 days period may not be extended. If you do not reply then HM Revenue & Customs (HMRC) will be automatically considering this act as a refusal to accept Code of Practice 9 (COP 9) offer. Recipient (tax payer/suspect) of the Code of Practice 9 (COP 9) letter should consider the implications or effect what may happen is based on what they decide to do once they receive Code of Practice 9 (COP9) letter.
Recipient (tax payer/suspect) of Contractual Disclosure Facility (CDF) have the option to:
Recipient (tax payer/suspect) can only choose one of these options, but if they fail to choose one or fail to make a valid notification. HM Revenue & Customs (HMRC) will treat this as a conscious decision not to accept their offer, and HM Revenue & Customs (HMRC) will not be bound by any Contractual Disclosure Facility (CDF) terms. HM Revenue & Customs (HMRC) are unable to enter into any discussion about the recipient (tax payer/suspect) tax affairs. Unless until either recipient (tax payer/suspect) have notified HM Revenue & Customs (HMRC) of how recipient (tax payer/suspect) wishes to proceed, or the 60-day response period has expired.
If HM Revenue & Customs (HMRC) decides to take you to criminal prosecution, then you will have to find a reasonable legal expert (solicitors) to work as a bridge between HM Revenue & Customs (HMRC) and Zero One Consultants to complete your forensic accounts. In either case, you are being prosecuted as civil or criminal do not ignore the intensity of the matter. A badly handled case can result in enormous penalties and even risk of losing your assets.
If you have received the letter, we advise you to see someone at Zero One Consultants at your earliest convenience. We will guide you further what to do, how to do, where to do and how can you appoint Zero One Consultants to deal with HM Revenue & Customs (HMRC) about your Code of Practice 9 (COP 9). We will provide you further guidance after having some meetings with you, where we assess the quantum of tax loss, scale of the problem and the HM Revenue & Customs’ (HMRC) acquisitions.
There is not necessarily a guilty state after the letter is issued to you. You may have your solid reasons, and evidence to support them, or HM Revenue & Customs (HMRC) may have been given false information. HM Revenue & Customs (HMRC) is very open about that; you need to remember that they are only doing their job, which is to act on suspicious activity.
Nothing can be decided without having an assessment. You must contact Zero One Consultants with your letter and then we will advise you in our first meeting, which may be free of charge but will be time-limited, and if we come to your place, there will be certain charges involved. In this meeting, we will give you an estimate of how many hours may involve, there will be upfront or payment on account required and then gradual payments, final work will be provided to you or HM Revenue & Customs (HMRC) after clearing the final bill.
Click below or ring us to book an initial meeting for your needs:
Now if you like to read in detail about Code of Practice 9 (COP 9) and forensic Accounts, read the details below.
Forensic Accounts, Tax Investigations
Code of Practice 9 (COP 9)
Tax Loss to HM Revenue & Customs (HMRC)
1. Scope of Code of Practice 9 (COP 9)
The Commissioners of HM Revenue & Customs (HMRC) reserve complete discretion to pursue a criminal investigation with a view, to prosecution where they consider it is necessary and appropriate. In cases where a criminal investigation is not started, the Commissioners of HM Revenue & Customs (HMRC) may decide to investigate using the Code of Practice 9 (COP9) investigation of fraud procedure. Under the investigation of fraud procedure, the recipient (tax payer/suspect) of Code of Practice 9 (COP9) is given the opportunity to make a complete and accurate disclosure of all their deliberate and nondeliberate conducts, irregularities and any inaccuracies in their tax affairs.
Where HM Revenue & Customs (HMRC) suspects that the recipient (tax payer/suspect)’s has failed to make a full disclosure of all irregularities, the Commissioners of HM Revenue & Customs (HMRC) reserve the right to start a criminal investigation to prosecution. The term ‘deliberate conduct’ means that the recipient (tax payer/suspect) knew that an entry or entries included in a tax return and/or accounts were wrong, but the recipient (tax payer/suspect) submitted it/them to HM Revenue & Customs (HMRC) surely believing that HM Revenue & Customs (HMRC) will not find them anyway, or that the recipient (tax payer/suspect) knew that a liability to tax existed at the time of submission but chose not to tell HM Revenue and Customs (HMRC) at the right time.
2. Suspicion of Fraud
HM Revenue & Customs (HMRC) have information that gives HM Revenue & Customs (HMRC) reasons to suspect that the recipient (tax payer/suspect) have committed tax fraud. HM Revenue & Customs (HMRC) will not usually tell recipient (tax payer/suspect) what their suspicions are. It is for the recipient (tax payer/suspect) to decide whether to make a disclosure to HM Revenue & Customs (HMRC) or decide not to. HM Revenue & Customs (HMRC) will keep an open mind to the possibility that there may be an innocent explanation for the suspected fraud. HM Revenue & Customs (HMRC) will treat recipient (tax payer/suspect)’s fairly and politely, and by the law. HM Revenue & Customs (HMRC) will investigate their suspicions, with or without recipient (tax payer/suspect)’s co-operation. If you do not co-operate HM Revenue & Customs (HMRC) may:
- Start their investigation which may ultimately be a criminal investigation
- Get information about recipient (tax payer/suspect)’s financial and business affairs from third parties
- Take formal action including raising assessments for the tax and interest HM Revenue & Customs (HMRC) consider is due
- Charge significantly higher penalties
- Start legal proceedings to secure some or all of recipient (tax payer/suspect)’s assets
- Require a financial security from recipient (tax payer/suspect)’s against certain unpaid taxes and duties
3. Civil to Criminal Investigation
While the Code of Practice 9 (COP 9) investigation, if the recipient (tax payer/suspect) makes materially false or misleading statements, or provides materially false documents, the Commissioners of HM Revenue & Customs (HMRC) reserve the right to start a criminal investigation into that conduct as a separate criminal offence. HM Revenue & Customs (HMRC) issues this Code of Practice 9 (COP 9) in selected cases where HM Revenue & Customs (HMRC) suspects tax fraud. In many cases, HM Revenue & Customs (HMRC) carries out criminal investigations of suspected fraud with a view, to prosecution.
Under this Code of Practice 9 (COP 9), HM Revenue & Customs (HMRC) offers recipient (tax payer/suspect) instead the chance to make a full disclosure under a contractual arrangement called a Contractual Disclosure Facility (CDF).
The following section gives a summary of when HM Revenue & Customs (HMRC) could start a criminal investigation with a view, to prosecution.
If the recipient (tax payer/suspect) chooses to reject an offer made under the Contractual Disclosure Facility (CDF), then HM Revenue & Customs (HMRC) are not bound by any Contractual Disclosure Facility (CDF) terms. HM Revenue & Customs (HMRC) may start a criminal investigation into any tax fraud they suspect recipient (tax payer/suspect) who might have been involved in.
- b. Acceptance Letter but No Outline Disclosure or Make an Invalid Outline Disclosure
If the recipient (tax payer/suspect) fails to make a valid Outline Disclosure, either by not sending in an Outline Disclosure or failing to complete it correctly, the recipient (tax payer/suspect) will not have carried out their responsibilities under the Contractual Disclosure Facility (CDF). HM Revenue & Customs (HMRC) will not then be bound to observe our side of the contract, and we may start a criminal investigation into any suspected tax frauds.
- c. Incomplete Outline Disclosure
Where recipient (tax payer/suspect) Outline Disclosure does not disclose all tax, losses brought by your deliberate conduct, then HM Revenue & Customs (HMRC) may start a criminal investigation into any deliberate conduct that recipient (tax payer/suspect) have not disclosed. In these circumstances, the criminal investigation will be limited to the deliberate conduct recipient (tax payer/suspect) have not disclosed, the deliberate conduct on your Outline Disclosure will not be subject to criminal investigation by us.
- d. Making a False Statement
Where HM Revenue & Customs (HMRC) believe that the recipient (tax payer/suspect) may make a false statement or you have submitted false documents during the investigation, HM Revenue & Customs (HMRC) may start a criminal investigation into the false statement or document itself.
- e. False Formal Disclosure Documents
Where HM Revenue & Customs (HMRC) believes the Disclosure Report, Certificate of Full Disclosure, statement of assets and liabilities or the certificates of bank and credit card accounts operated are incorrect or incomplete, HM Revenue & Customs (HMRC) reserve the right to start a criminal investigation into the submission of those false documents.
4. Contractual Disclosure Facility (CDF)
The Contractual Disclosure Facility (CDF) offers recipient (tax payer/suspect) the chance to disclose any loss of tax that has been brought to HM Revenue & Customs (HMRC) by the recipient (tax payer/suspect) by deliberate conduct (HM Revenue & Customs (HMRC’s belief). This is a contract made between the HM Revenue & Customs (HMRC) and the recipient (tax payer/suspect) of Code of Practice 9 (COP 9). In the agreement, the recipient (tax payer/suspect) will enter if he/she agrees with HM Revenue & Customs (HMRC) notice of Code of Practice 9 (COP 9).
HM Revenue & Customs (HMRC) will keep an open mind to the possibility that there may be an innocent explanation for the suspected fraud, and HM Revenue & Customs (HMRC) will treat recipient’s (tax payer/suspect) fairly and politely, and in accordance with the law. HM Revenue & Customs (HMRC) will investigate their suspicions, with or without recipient’s (tax payer) co-operation.
Remember this offer expires 60 days after the recipient (tax payer/suspect) receives HM Revenue & Customs (HMRC) letter making the offer of Code of Practice 9 (COP9). Recipient (tax payer/suspect) has 60 days to respond once an offer is made. If the recipient (tax payer/suspect) makes a full disclosure of your deliberate conduct, HM Revenue & Customs (HMRC) will not pursue a criminal investigation with a view, to prosecution. HM Revenue & Customs (HMRC) expects you to stop any deliberate conduct that has led or may lead to a future tax loss immediately. A specially trained authorised officer will handle the Code of Practice 9 (COP 9) investigation into your tax affairs, and recipient (tax payer/suspect) will be given a named contact.
5. Offer to Contractual Disclosure Facility (CDF)
In a case that HM Revenue & Customs (HMRC) think that it is suitable for the recipient (tax payer/suspect) to be dealt with under a Contractual Disclosure Facility (CDF) HM Revenue & Customs (HMRC) will make a formal offer. HM Revenue & Customs (HMRC) offer and recipient (tax payer/suspect)’s acceptance of it, within 60 days, create the contractual arrangement between us. This gives you the assurance that you will not be criminally investigated for the irregularities in your tax affairs that you have disclosed under the terms of the Contractual Disclosure Facility (CDF). A valid Contractual Disclosure Facility (CDF) arrangement can only be made by you accepting the standard offer HM Revenue & Customs (HMRC) have made. HM Revenue & Customs (HMRC) will not make an offer on any other terms. The Contractual Disclosure Facility (CDF) terms are not binding on either party unless HM Revenue & Customs (HMRC) receive recipient (tax payer/suspect)’s acceptance. A standard acceptance letter is attached to the Contractual Disclosure Facility (CDF) offer. Recipient (tax payer/suspect) just needs to sign, date and return it.
6. Recipient (tax payer/suspect)’s (tax payer/suspect) Options,Code of Practice 9 (COP 9)
Recipient (tax payer/suspect) will make a full disclosure of all tax irregularities under the terms of the Contractual Disclosure Facility (CDF). To comply with recipient (tax payer/suspect)’s part of the contract, in agreement with Contractual Disclosure Facility (CDF), the recipient (tax payer/suspect) needs to complete the 2 stage disclosures:
A valid Outline Disclosure of the deliberate conduct that brought about a loss of tax. Recipient (tax payer/suspect) must make a valid Outline Disclosure within 60 days of the date recipient (tax payer/suspect) receives HM Revenue & Customs (HMRC) offer (this is the same date as the time given for you to decide whether to accept our offer starting from the date you receive HM Revenue & Customs’ (HMRC) offer letter.
A certified statement that recipient (tax payer/suspect) has made a full, complete and accurate disclosure of all tax irregularities together with certified statements of recipient (tax payer/suspect) assets and liabilities, and of all bank accounts and credit cards recipient (tax payer/suspect) have operated. Where the tax loss from the recipient (tax payer/suspect) deliberate conduct is self-contained and easily quantified, there may be nothing else for the recipient (tax payer/suspect) to do following recipient (tax payer/suspect) Outline Disclosure. Recipient (tax payer/suspect) will need to agree what they owe to HM Revenue & Customs (HMRC), arrange payment and certify that recipient (tax payer/suspect) have disclosed all irregularities. This is recipient (tax payer/suspect)’s Formal Disclosure. In most cases, much more work will be necessary before recipient (tax payer/suspect) will be able to make their Formal Disclosure. HM Revenue & Customs (HMRC) will expect you to prepare a Disclosure Report, as this is the best way to ensure that this work is done properly.
This is the only way that recipient (tax payer/suspect) can be certain that HM Revenue & Customs (HMRC) will not carry out a criminal investigation into the tax frauds they suspect.
The Contractual Disclosure Facility (CDF) is only suitable for you if you:
- i. Have brought about a loss of tax through your deliberate conduct
- ii. Wish to fully disclose the loss of tax, that you have brought about through your deliberate Conduct
- iii. Will work with us to put your tax affairs in order including paying any tax, interest and penalty that you owe
- iv. Stop any continuing deliberate conduct immediately
- ➢In exchange for your full disclosure of all irregularities, we will not pursue a criminal investigation into the conduct you disclose.
- ➢The Contractual Disclosure Facility (CDF) is not appropriate for people who want to disclose only careless errors or mistakes.
7. Effects of Entering (signing) Contractual Disclosure Facility (CDF)
To comply with the terms of the contract, the recipient (tax payer/suspect) will be admitting that the tax has been lost because of the recipient (tax payer/suspect) deliberate conduct. This means HM Revenue & Customs (HMRC) may be able to seek recovery of the tax, interest and associated penalties you may have evaded for as far back as 20 years. If the recipient (tax payer/suspect) enters a Contractual Disclosure Facility (CDF), HM Revenue & Customs (HMRC) expects you to co-operate fully with them. Full co-operation is the only element that may/will ensure that recipient (tax payer/suspect) achieves the greatest possible reductions for any penalty that may be due. More information on HM Revenue & Custom’s (HMRC) penalty regimes visits HM Revenue & Customs (HMRC) Penalties.
If the recipient (tax payer/suspect)'s co-operated fully with our investigation, you will achieve a greater reduction in any penalty found to be due. You may also be able to avoid other civil sanctions such as insolvency and, in some cases, the publication of your name and details. You must read this Code of Practice carefully and discuss it with your tax adviser if you have one. You must keep all existing records, including any computer records, during our investigation whether you need to do so by law. We may ask to see your business and private financial records. The Code of Practice 9 (COP 9) applies to all tax losses brought by your deliberate conduct. HM Revenue & Customs (HMRC) has a complete authority when can HM Revenue & Customs (HMRC) publish details of deliberate defaulters and how they may need to monitor your tax affairs more closely under our Managing Serious Defaulters Programme (MSDP).
- ➢Making your Formal Disclosure does not signify the end of our investigation, but it does mean you have complied with the terms of the Contractual Disclosure Facility (CDF).
8. Rejection Route
If the recipient (tax payer/suspect) does not believe that they have brought about a loss of tax through their deliberate conduct. Recipient (tax payer/suspect) can sign and return the Contractual Disclosure Facility (CDF) Rejection Letter, within the same 60-day period. HM Revenue & Customs (HMRC) is happy to consider any explanations or documents that support recipient (tax payer/suspect) rejection of Contractual Disclosure Facility (CDF) letter. Recipient (tax payer/suspect) should only choose the rejection route if they genuinely believe that they have not brought about a loss of tax through their deliberate conduct. If the recipient (tax payer/suspect) signs the Rejection Letter, HM Revenue & Customs (HMRC) will start their investigation which can/may be a criminal investigation. Your Rejection Letter may also be used in court or tribunal proceedings as evidence.
If HM Revenue & Customs (HMRC) decided to proceed with a civil investigation in response to your rejection of their offer, HM Revenue & Customs (HMRC) reserve the right to escalate the case to a criminal investigation at a later date if we consider it is appropriate. If HM Revenue & Customs (HMRC) have not heard from recipient (tax payer/suspect) within 60 days after recipient (tax payer/suspect) receives HM Revenue & Customs (HMRC) offer letter then HM Revenue & Customs (HMRC) will treat this as a conscious decision, not to accept our offer. HM Revenue & Customs (HMRC) will begin a criminal or a civil investigation into the tax fraud when they suspect recipient (tax payer/suspect) has committed. If the recipient (tax payer/suspect) has brought about a loss of tax through their deliberate conduct, but they deny it, this may result in a criminal investigation. This may lead to prosecution, or significantly higher civil financial penalties, and the potential publication of recipient’s (tax payer/suspect) details.
HM Revenue & Customs (HMRC) may use their statutory information powers if necessary and may approach third parties for information. If the recipient (tax payer/suspect) engages and co-operates fully with HM Revenue & Customs (HMRC), they may not need to use their formal powers. If irregularities are discovered, HM Revenue & Customs (HMRC) will take formal action against recipient (tax payer/suspect) including the issue of assessments, and will pursue collection of any unpaid taxes and interest. Recipient (tax payer/suspect) will also have lost the opportunity to earn the greatest possible reduction of any penalty that recipient (tax payer/suspect) owes. Where HM Revenue & Customs (HMRC) verify and accept recipient’s (tax payer/suspect) rejection of the Contractual Disclosure Facility (CDF), HM Revenue & Customs (HMRC) will issue a confirmation that they no longer suspect recipient (tax payer/suspect) of tax fraud.
9. Appointing an Agent or Qualified Adviser
HM Revenue & Customs (HMRC) strongly advise recipient (tax payer/suspect) of Code of Practice 9 (COP 9) letter to seek independent professional advice. Recipient (tax payer/suspect) may already have an appointed adviser if so, then recipient (tax payer/suspect) should contact them immediately. However, many people find it helpful to appoint a specialist adviser who is familiar with Code of Practice 9 (COP 9), as well as their regular adviser. If you want HM Revenue & Customs (HMRC) to deal directly with your adviser on all matters covered by the Code of Practice 9 (COP 9), the recipient (tax payer/suspect) must make sure that they have given HM Revenue & Customs (HMRC) full authority to do so.
Recipient (tax payer/suspect) can use either form 64-8, ‘Authorising your agent’ or from Comp1, ‘Compliance checks: temporary authorization to allow HM Revenue & Customs (HMRC) to deal with recipient (tax payer/suspect)’s tax adviser to do this, making sure that recipient (tax payer/suspect)’s authority covers all taxes and duties. Alternatively, the recipient (tax payer/suspect) can fill out the agent details box on the Outline Disclosure form. Recipient (tax payer/suspect) are personally responsible for their tax affairs and the accuracy of the information supplied to HM Revenue & Customs (HMRC), and so recipient (tax payer/suspect) must give your adviser all the facts. We expect high standards from your appointed adviser. While we will normally deal with them directly if there are any delays or problems HM Revenue & Customs (HMRC) will contact recipient (tax payer/suspect).
- ➢Any costs that you incur for our enquiries cannot normally be claimed as an expense against tax.
