Civil tax fraud investigations—Code of Practice 9
Produced in partnership with Corker Binning
Civil tax fraud investigations—Code of Practice 9

The following Corporate Crime guidance note Produced in partnership with Corker Binning provides comprehensive and up to date legal information covering:

  • Civil tax fraud investigations—Code of Practice 9
  • Civil investigation of tax fraud
  • Who can a COP9 procedure be issued to?
  • Outline disclosure
  • Disclosure report
  • Formal disclosure
  • Agreement of liabilities
  • Publishing details of deliberate defaulters
  • Criminal investigations and COP9

Civil investigation of tax fraud

HMRC’s published policy in respect of tax fraud states that HMRC will seek to use a civil rather than criminal procedure wherever appropriate. Criminal investigation and prosecution is expensive and therefore counter to HMRC’s revenue raising function. Criminal prosecutions are therefore reserved to cases where they will be an effective deterrent or involve certain other aggravating features (such as part of an organised plan).

As an alternative to criminal investigation, in circumstances where deliberate conduct has brought about a loss of tax, HMRC may use a civil investigation of fraud procedure, as set out within Code of Practice 9 (COP9). The mechanism implemented by COP9 is that of a Contractual Disclosure Facility (CDF), which offers the recipient the chance to make full disclosure of their conduct, with HMRC agreeing not to instigate a criminal investigation or prosecution in relation to the conduct disclosed.

The procedure set out in COP9 is available where HMRC have reasonable grounds to suspect tax fraud or where an individual voluntarily admits tax fraud. The defaulting tax payer is required to make full disclosure and repay any tax and interest incurred over the preceding 20 years, together with a financial penalty. In return or in consideration of this disclosure, HMRC will not instigate a criminal investigation or prosecution in relation to the