United Kingdom

Civil Investigation of Fraud 

HMRC conducts investigations using COP 9 for cases of suspected serious fraud. The investigation will be conducted by Specialist Investigations (SI) or Civil Investigation of Fraud (CIF) teams. SI would typically deal with larger cases.

The Civil Investigation of Fraud procedure using COP9 was completely re-written on 31 January 2012 to the Contractual Disclosure Facility. However, existing COP9 cases at 31 January 2012 will continue to be worked using the Civil Investigation of Fraud Procedure.


A COP9 case follows an entirely different procedure to any other type of HMRC enquiry and it is essential that clients fully understand what is involved and the importance of making a full and complete disclosure.


Some of the main points to consider are as follows:

  • Once a case is selected for COP9, a taxpayer has a guarantee against criminal prosecution for tax offences already committed. Through this investigation HMRC is working towards a civil settlement of tax (possibly going back 20 years or even longer for Inheritance Tax), penalties and interest. If, however, materially false statements are made or materially false documents are provided with intent to deceive during the course of a civil investigation, HMRC may then conduct a criminal investigation.
  • HMRC will request an initial meeting early in the process during which the taxpayer will be expected to make an outline disclosure of the tax irregularities.
  • Following the initial meeting it is necessary to prepare and, in due course, submit a disclosure report to HMRC. The contents will vary from case to case but is likely to include:


  • A brief personal and business history
          • the nature of the irregularities and how they came about
          • the extent of the irregularities
          • steps taken to verify amounts with supporting documentation and any assumptions made
          • a detailed schedule of the irregularities for each period involved for each tax
          • a statement of personal assets and liabilities and a statement of bank and credit cards operated.

 

Plumbers - HMRC COP9 enquiries

HMRC has announced that 5 plumbers have been arrested and around 600 are under Civil Investigation by HMRC for failing to pay the right amount of tax. This follows HMRC’s Plumbers Tax Safe Plan (PTSP) which provided an opportunity for plumbers (and others) to come forward voluntarily. HMRC is now using the data it had gathered before announcing the PTSP. The PTSP was of limited success in terms of the numbers making a disclosure and in the size of those disclosures. HMRC is sending a clear message that it will use its ever increasing data against those it considers have had an opportunity to come clean. If you are under investigation by HMRC using Code of Practice 9, or wish to make a voluntary disclosure to secure lower penalties and peace of mind please contact us for a free no obligation discussion.

 

Contact

Derek ScottDerek Scott

 

+44 (0)20 7311 2618
taxinvestigations@kpmg.co.uk

Liechtenstein Disclosure Facility (LDF)

The Liechtenstein Disclosure Facility (LDF) provides a framework for the disclosure of irregularities connected with overseas assets held anywhere in the world with unique benefits and on favourable terms.

 

Tax Settlements and Investigations

KPMG can also assist companies, partnerships, employers, trustees, solicitors, accountants and other advisors navigate through the demanding process of an HMRC investigation.