Not all tax fraud in the UK results in a criminal investigation and prosecution. HMRC still has discretion to offer taxpayers whom they suspect have been involved in deliberate fraud an opportunity to make a full disclosure in return for a promise that the matter will be conducted under its code of practice (known as COP9).
At the present time, COP9 is the only facility open to a taxpayer in which HMRC will, in certain circumstances, offer a written guarantee of no criminal investigation. Specially trained officers within the FIS Directorate work the individual cases. Incidentally, ‘FIS’ (pronounced ‘FIZZ’) has nothing to do with champagne but stands for Fraud Investigation Service.
Most COP9 cases are started by HMRC, but a taxpayer who wishes to come forward and make a voluntary disclosure is usually received with a welcome. If handled correctly, the procedure is the same and the financial penalties are usually much lower than where HMRC initiates the investigation. The modern practice is for HMRC to offer a contract to the taxpayer to participate in its Contractual Disclosure Facility (‘CDF’) whereby in return for a full disclosure of all deliberate tax fraud, continuing cooperation throughout the enquiry and payment of tax, interest and penalties, the enquiry will result in a civil settlement I.e. a monetary payment. The taxpayer will not face court proceedings and no criminal record can result. Depending on the circumstances, no publicity will result – something very important to prominent and high net worth individuals. Bearing in mind that HMRC’s commitment includes deliberately dishonest behaviour such as ‘cheating the public revenue’ (for which the maximum penalty is life imprisonment), the statutory offence of fraudulent evasion of tax and even deliberately claiming repayments to which one is not entitled, this is quite an offer!
How we can help
Withers has highly experienced tax investigation practitioners who have had extensive experience in COP9 investigations over many years. We have advised clients in relation to those investigations as well as criminal and civil investigations appertaining to both direct and indirect tax investigations. We also have highly experienced partners who handle the full spectrum of other white collar financial fraud and related matters, frequently engaging with domestic and overseas law enforcement agencies and regulators, exercising both criminal and civil powers.
We support and guide the taxpayer throughout what would otherwise be a stressful investigation with minimum disruption to their lives. We will work with your existing accountants or recommend specialist accountancy firms to ensure that the correct amount of tax is calculated, and your tax affairs are brought up to date and regularised as expeditiously as possible. We will always begin by providing advice under legal professional privilege and help draft the outline disclosure. Once accepted, we will attend and support the taxpayer at HMRC meetings – which are frequently held in the more familiar surroundings of our own offices – and provide guidance throughout the full disclosure process right up to the negotiation and implementation of a settlement.
Our experience in this area includes
- Acting for a number of FCA regulated individuals
- Acting for individuals in the sports and entertainment industry
- Advising professional intermediaries
- Advising legal, accountancy and other professionals in relation to their regulatory as well as tax obligations
- Numerous high net worth or famous individuals who have used the process to avoid a criminal investigation
- Working closely with our media and reputation management team and any other team which can add value to the process.
For further information, please contact:
Jeff Millington, Partner, Withersworldwide
jeff.millington@withersworldwide.com
