We are leading experts in this field, our highly skilled and knowledgeable Tax Investigations Team comes with more than thirty-five years of experience operating at the sharp end in HMRC, as former tax inspectors in Fraud Investigation Service, advising and leading on serious and complex fraud investigations.
We are well versed with the ‘tricks of the trade’ and operational tactics deployed by HMRC. The key here is to understand what is driving HMRC in relation to your tax affairs and ensure you are being treated fairly and within the law.
We are experts in handling civil tax enquiries under Code of Practice 8 (COP8), Code of Practice 9 (COP9) and have experience and the resources to deal with criminal investigations.
Leave the worry to us, trust in us and we will help you by communicating directly with HMRC, advising on your legal rights, operational processes, resolving tax disputes and negotiating a fair and correct settlement on your behalf and handling tax litigation and appeal matters as appropriate.
Get help now, call our team on 0121 638 0315
Why me?
Tax investigations are official enquiries carried out by HMRC into your personal or business tax affairs using appropriate legal powers and this can be past or present.
The ‘why me’ is the million dollar question and can be difficult to answer, coming to terms with what is happening even harder since HMRC are not obliged to set out detailed reasons for opening a tax enquiry.
It can arise from something as simple as random tax enquiries or routine work, where something does not sit right and HMRC make a decision to investigate matters further so it can test the credibility of declarations made on tax returns and accounts.
At the other end of the spectrum, tax investigations can arise where there is a suspicion of serious fraud and tax evasion from the outset, for example, this might involve:
- False invoices
- Cash extractions
- Understated income
- Misrepresentation of facts
- Failure to report the correct sources of income on tax returns
HMRC will first rule out the question of criminal investigation, if so, this is normally dealt with under Code of Practice 9 (COP 9) worked in Fraud Investigation Service (FIS), a dedicated and specialist unit within HMRC.
Code of Practice 9 – Serious Fraud
Tax investigations under COP 9 are by far the most serious type of civil tax investigation undertaken by HMRC. As already stated above, this is assuming the question of criminal investigation has been ruled out by reference to the principles set out in HMRC Criminal Investigation Policy.
Please click to here to view Code of Practice 9
If challenged under COP 9, you have an opportunity to offer full cooperation and make a full disclosure of any and all tax irregularities in your personal and business affairs in the last 20 years.
This process, known as the contractual disclosure facility (CDF) gives you immunity from criminal prosecution but only if you make a full and truthful disclosure and admit that you have acted deliberately in relation to the suspected tax fraud. This will mitigate the quantum of tax penalties determined by HMRC as part of any tax settlement.
Get help with COP 9 Call us on: 0121 638 0315
If you receive a notice of tax enquiry, be it routine or targeted under COP 8 or COP 9, it is time to act promptly and decisively. There is no ‘do nothing’ option, the enquiry will not go away of its own accord. The quicker you act the better. You need to stay on top of your tax affairs and take advice from the experts.
As former tax inspectors, we will represent you throughout the process, manage deadlines, argue your corner on tax law and adjustments proposed by HMRC and clear a path to resolution and financial settlement.
This will include:
- Consultation with you at the start of the process
- Preparing and completing CDF disclosure within time
- Attend the opening meeting with you at HMRC
- Prepare Disclosure Report and Certification
- Deal with HMRC enquires into disclosure report or tax investigation
- Resolution of outstanding points and adjustments needed
- Reach agreement on penalty position
- Negotiate tax settlement with HMRC
Code of Practice 8 – Significant Loss of Tax
FIS handle cases under Code of Practice 8 where large tax losses are suspected through complex tax arrangements where tax avoidance (rather than tax evasion) is suspected.
This Code of Practice explains how the Fraud Investigation Service (FIS) at HM Revenue and Customs (HMRC) carries out civil investigations in certain cases where the Code of Practice 9 is not used.
Most tax payers, pay what is due but some deliberately try to pay less than the correct amount or take advantage of a scheme or device to reduce a tax liability. If HMRC suspect this, they will investigate under Code of Practice 8 to establish the facts to recover any tax, interest and penalties due.
HMRC will not undertake this investigation with a view to a criminal prosecution but may take a different approach if they suspect or find evidence of fraud at any time during the investigation. The status of the investigation may then switch from Code of Practice 8 to Code of Practice 9, or if it is being conducted with a view to criminal prosecution, HMRC will investigate under the Police and Criminal Evidence Act 1984 and the Criminal Procedure and Investigation Act 1996.
HMRC will investigate any situation where they believe that there may be a significant loss of tax. This includes the tax affairs of individuals, partnerships, limited liability partnerships (LLPs), companies and trusts and covers all of the taxes, duties, levies and contributions for which HMRC is responsible.
If you receive a letter notifying you of an investigation under Code of Practice 8, it is a serious matter and you should seek urgent and specialist advice at the earliest opportunity.
Voluntary Disclosure
If you can’t sleep at night and have something to get off your chest, we can advise you and help in making a voluntary disclosure to HMRC, this will help you to bring your tax affairs up to date and not have the worry of constantly looking over your shoulder.
The process of voluntary disclosure is looked upon favourably by HMRC and you will be credited for drawing attention to the point at issue. It is no guarantee that HMRC will act in a particular way, all options will remain open until the facts, circumstances and disclosure has been fully reviewed. The decision to proceed in a particular way is entirely in the hands of HM Revenue and Customs but you can influence the decision by making a full and truthful disclosure.
HMRC cannot offer immunity from prosecution but an important factor when they are deciding whether to carry out criminal investigations into cases of tax fraud is whether you have made a complete and unprompted disclosure of any amounts evaded or improperly reclaimed.
An important factor for HMRC in deciding if they will carry out civil or criminal investigations into cases of financial fraud is whether the taxpayer or taxpayers have made a complete and unprompted disclosure of any amounts evaded or improperly reclaimed. While HMRC would consider each case on its merits, a complete and unprompted disclosure would generally suggest that a civil (rather than criminal) investigation was appropriate.
A voluntary disclosure will reduce the amount of the financial settlement in so far as it relates to potential penalties chargeable under the law. It will not reduce the amount f tax due and interest payable and these figures can only be determined once the facts are established and tax computations are complete.
We have the expertise and experience as former Tax Inspectors in HMRC to deal with your voluntary disclosure in a professional and effective manner.
Appeal Litigation and alternative Dispute Resolution
The statue and tax law is notoriously complicated and difficult to follow for tax experts let alone members of the publics and business people.
We will work with you and HMRC to resolve matters in a cost effective and efficient manner. In some cases this may not be possible because the tax due may be dependant on an interpretation of the law or simply down to facts that cannot be agreed between you and HMRC. This will generate an appeal to the First Tier Tax Tribunal (FTT) which is an independent panel with a residing Judge who will adjudicate and make a decision on the tax dispute. The process and tribunal rules are important. You will need expert advice and care to ensure all tax directions are met and that you are ready for the appeal hearing if it gets to that stage.
We will do our best to avoid the cost of a hearing by exploring all options including continued negotiations with HMRC and representing you in Alternative Dispute Resolution (ADR) proceedings before the matter gets to tax tribunal. The purpose of these discussions will be to resolve or narrow down the tax issues in dispute.
We have experience of helping clients with ADR and appeal hearings at FTT and have the resources to engage legal representation at hearings.
Please get in touch and we will give you an honest opinion on your case.
