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Taxpayers facing a code of practice 9 (COP9) investigation will no longer be able to take the denial route, after HMRC withdrew the option.
Fraud suspects offered the chance to make a full disclosure previously had three options:
Taxpayers facing a code of practice 9 (COP9) investigation will no longer be able to take the denial route, after HMRC withdrew the option.
Fraud suspects offered the chance to make a full disclosure previously had three options:
- contractual disclosure facility (CDF): admit the fraud and cooperate with the Revenue;
- denial: not admit to fraud but cooperate; and
- non-cooperation: deny fraud and refuse to cooperate.
Parties who receive a letter telling them they are subject to a COP9 investigation must now choose CDF or non-cooperation. The axing of the denial option will have largely negative consequences, according James Bullock, head of litigation at solictiors Pinsent Masons.
“It will lead to considerable uncertainty, a lack of any control over, or even lack of, engagement with HMRC’s investigation, the inevitability of significantly higher penalties, and a much greater likelihood of criminal prosecution,” he said.
Bullock noted that denial did not afford immunity from prosecution but did offer taxpayers who were “genuinely confounded by the receipt of COP9 the opportunity to engage with HMRC, and, in many cases, reach a resolution short of an admission of fraud.
“Anyone in a regulated profession and increasingly anyone looking, for example, to borrow significant sums of money, can be seriously affected by having made an admission of fraud, which is what the CDF route amounts to.”
