{"id":398,"date":"2011-03-07T15:14:55","date_gmt":"2011-03-07T15:14:55","guid":{"rendered":"http:\/\/www.forestsoftware.co.uk\/blog\/?p=398"},"modified":"2015-04-13T14:31:34","modified_gmt":"2015-04-13T13:31:34","slug":"code-of-practice-9-civil-investigation-of-fraud","status":"publish","type":"post","link":"https:\/\/www.forestsoftware.co.uk\/blog\/2011\/03\/code-of-practice-9-civil-investigation-of-fraud\/","title":{"rendered":"Code of Practice 9: Civil Investigation of Fraud"},"content":{"rendered":"Reading Time: <\/span> 3<\/span> minutes : <\/span><\/span>

I consider myself a typical small business owner and as such recognise that I have to have a passing knowledge of lots of subjects (while knowing that there are experts I can turn to if there is something I’m not sure about or have no knowledge of).<\/p>\n

Recently I was talking to a friend and they mentioned the HMRC Code of Practice 9: Civil Investigation of Fraud (COP9).\u00a0 This was a new idea to me as I thought that if you were investigated for fraud by the HMRC that this was a criminal matter and not a civil one.\u00a0 Because it was something that I’d not heard of, and being the kind of business owner that doesn’t appreciate having surprises sprung on me I decided to investigate it a little more.<\/p>\n

It seems that where there are substantial tax irregularities and that HMRC suspect serious fraud may have taken place (where the under-declared tax + interest + penalties are likely to generate more than \u00a375,000) that the HMRC can decide to investigate using a civil fraud procedure where they will not seek a prosecution for the tax fraud that is covered by the investigation.\u00a0 However if during the course of the investigation false statements are made or false documentation is submitted HMRC reserve the right to prosecute that conduct.\u00a0\u00a0 If you are facing a “code of practice 9” investigation you should have been given a copy of this statement<\/a>\u00a0and you need to contact your accountant as soon as possible.<\/p>\n

Unlike many tax investigations, where you may be dealing with a local tax inspector, COP9 investigations are carried out by one of two specialist departments in the HMRC,\u00a0 both of these departments (the Civil Investigation of Fraud Unit & the Specialist Investigations Team) are staffed by highly trained and experienced tax fraud investigators, and cover all elements of tax including Income Tax, Corporation Tax, Capital Gains Tax (CGT), PAYE and VAT.<\/p>\n

The advantage of a COP9 investigation seems to be that it gives the person being investigated the chance to avoid prosecution in the courts and helps reduce the penalties being applied however it does require that at the first meeting with the tax investigators you are asked if you have anything to disclose, and if you\u00a0say yes you are committed to\u00a0produce something called a Full Disclosure Report.\u00a0 This report should cover :<\/p>\n