COP8 cases tend to be those which are serious, but where HMRC cannot demonstrate strongly enough that they have a suspicion that tax fraud has taken place and therefore do not use their COP9 or CDF routes.
Where HMRC think that someone may have tried to pay less tax than they should have, or if they think that someone is looking to gain a tax advantage through a "scheme" which is designed to reduce their tax due, HMRC may decide to investigate the matter through Code of Practice 8 (COP8). HMRC refer to this as "Specialist investigations for fraud and bespoke avoidance" and the COP8 factsheet can be found here.
While this is not usually deemed as serious as a COP9 Investigation, we urge caution when dealing with such an investigation and highly recommend seeking expert advice at an early stage. The COP8 factsheet states:
"We will not undertake this investigation with a view to a criminal prosecution but we may take a different
approach if we suspect or find evidence of fraud at any time during our investigation. We may then deal
with the investigation under Code of Practice 9. Or, if it is being conducted with a view to criminal prosecution, we will investigate under the Police and Criminal Evidence Act 1984 and the Criminal Procedure and Investigation Act 1996 and their respective Codes of Practice."
This shows just how serious HMRC take COP8 investigations and we recommend that our clients take these investigations just as seriously.
If you or one of your clients receive a letter from HMRC which states that they are conducting an investigation under COP8, please contact us as soon as possible so that our experts can discuss how best to respond and take forward the investigation on your behalf.
Have you or one of your clients received a COP8 letter from HMRC? Before you respond to the letter, please contact us as soon as possible so that we can make sure that you take the necessary steps to ensure that any response is correct, complete and most importantly does not prejudice the future of any resulting investigations.