HMRC Disputes

HMRC’s most serious and specialist Investigation Units, under their “Fraud Investigation Service” Directorate, actively and intrusively investigate many individuals, businesses, companies, trustees, structures (onshore and offshore) and other scenarios under the COP8 procedure.

COP8 cases are those where HMRC do not suspect tax fraud and therefore do not use their Contractual Disclosure Facility (COP9 or CDF) process.

COP8 is often the way HMRC chooses to investigate tax avoidance schemes or arrangements that HMRC might perceive to mitigate taxes through avoidance.

However, other typical COP8 cases can involve where large amounts of money that HMRC believe are due, high profile or wealthy individuals in the public eye, international tax or VAT issues where the UK is just one jurisdiction or complex tax affairs or arrangements.

Whenever HMRC believe there is an attempt to pay less than the correct – in their view – amount of tax or a taxpayer seeks to take a tax advantage from a tax scheme or arrangements to reduce or eliminate tax liabilities, HMRC will investigate the matter thoroughly under COP 8.

HMRC’s aim is to successfully challenge the position and to recover the tax due plus to also obtain interest and penalties (up to 100% of the tax for onshore and 200% of the tax for offshore matters) owed.

Whilst COP8 is not a tax fraud investigation to CDF or COP9 standards, if HMRC establish evidence of tax fraud, they may transfer the case to one of CDF or COP9 or possibly even begin a criminal investigation.

HMRC openly advise that if you are subject to a COP8 investigation you should seek expert help from an experienced practitioner.