As it was once said ‘Nothing matters but the facts. Without them, the science of investigation is nothing more than a guessing game.’ But that’s no more the case with COP9 criminal tax fraud investigation executed by HMRC.

In the very recent days HMRC have been very active in transferring normal inquiries and investigation to COP9 where taxpayer has shown tendency or behaviour of non-cooperativeness.  Most of book keepers and accountants who are not familiar with the investigative nature of COP9 criminal tax fraud investigation, find it difficult to question and police clients of their financial frauds and tax evasion.

HMRC under COP9 investigations do not prosecute on suspicion but they have reason to believe that a tax fraud has been committed. This credence may have been established through an ongoing inquiry or tax man may have investigated and the details of tax payer may have been searched on CONNECT. Whatever the reason taxpayer is the best person to know what tax has been evaded.

Still there is a chance for the tax payer to play ‘get out of jail’ card by submitting a disclosure and explain the reasons behind tax evasion or avoidance. Tax payer will also have to establish and disclose the amount of tax he believes what is owed to HMRC. COP9 Investigation demand a proactive approach by the tax payer towards his tax liabilities and compliance.

Here is a simple list for Accountants what they should look for if a client approaches them with a COP9 Investigation.

  1. Can client still take advantage of contractual disclosure facility?
  2. What and how client has responded to the previous HMRC investigations?
  3. Interview client but don’t advice before he is finished, logical reasoning.
  4. Make a record of all meetings and paperwork, in and out with date and time stamp.
  5. Start listing the documents needed in standard routine to draw financial accounts.
  6. Make a list of all documents and sources.

Conducting COP9 criminal tax fraud investigation can be a daunting task, which will take time, energy and lot of knowledge. Not all accountants or tax advisors are trained to that extent. It takes years of experience where an accountant or a tax adviser can establish tax payer behavior and discovering the truth concealed behind the accounting records.

The extent and awareness of serious nature of this kind of investigation is not elucidated to all clients or tax payers. There will be clients who have been made bankrupt by HMRC in past and have gone through a tax investigation with a definite result of tax evasion. What most accountants and clients do not know when HMRC starts a COP9 Investigation, it is evident taxman will consider the history of taxpayer past investigations. Being bankrupt by HMRC does not mean that taxpayer should not mention that period in his disclosure. The tax of past investigations whether paid or not should be included with the current liability.

If you are tax payer and have received COP9 criminal tax fraud investigation letter from HMRC, please contact The Accountancy Solutions on 01216297768 for a free and no obligation discussion.