Code of Practice 9 (COP9)
HMRC Code of Practice 9 (COP9) and Contractual Disclosure Facility (CDF)
A Code of Practice 9 (COP9) from HMRC is a notice that the recipient is suspected of deliberate tax fraud. It carries an offer to enter the Contractual Disclosure Facility (CDF). You have 60 days from the date of the letter to respond, and the response shapes whether the matter is dealt with on a civil footing or escalates toward criminal investigation. HMRC's own guidance recommends that you appoint a specialist adviser at the outset.
Vision Consulting acts for individuals who have received a COP9 letter. The firm's COP9 work is led by Ghulam FCA, Managing Director, and Zaman FCCA, Senior Manager. Both have over 20 years of experience dealing with HMRC.
Vision Consulting acts for individuals who have received a COP9 letter. The firm's COP9 work is led by Ghulam FCA, Managing Director, and Zaman FCCA, Senior Manager. Both have over 20 years of experience dealing with HMRC.
What a Code of Practice 9 letter means
COP9 is HMRC's civil investigation procedure for suspected tax fraud, used when the Commissioners decide not to open a criminal investigation but reserve the right to do so. It is issued by the Fraud Investigation Service. The revised Code of Practice 9 took effect on 14 June 2023 and applies to all cases opened on or after that date. The letter does not tell you what HMRC suspects, what information it holds, or where the suspected fraud lies. That is by design. What you receive instead is a contractual offer: the chance to disclose any deliberate behaviour bringing about a loss of tax or duty, in exchange for HMRC not commencing a criminal investigation into what you disclose.
The Contractual Disclosure Facility (CDF) and the 60-day deadline
The CDF is the contract through which COP9 operates. You commit to making a complete, accurate, open and honest disclosure of all deliberate behaviour and any other tax irregularities; HMRC commits not to open a criminal investigation into what you disclose. The 60-day window begins on the date you receive the CDF offer. Within it, you must accept the offer and submit an Outline Disclosure, reject the offer, or do nothing, in which case HMRC treats the offer as deemed rejected and may proceed on either a civil or criminal basis. The 2023 refresh of the Code added a clear expectation that you make payments on account of tax owed during the disclosure process, beginning at the Outline Disclosure stage.
What if you have not committed tax fraud?
Not everyone who receives a COP9 letter has committed fraud. The CDF is the right route only if you accept that your deliberate behaviour has led to a loss of tax; accepting requires a full admission. If you do not believe that is the case, rejecting the offer is a legitimate response, but a considered one. Rejection does not end the matter. HMRC will continue its enquiry on a civil or criminal basis, using its information powers and third-party data. The 60-day window matters as much here as in an acceptance: it is the period in which a specialist adviser can review what you actually face and prepare a response that does not concede behaviour you have not engaged in.
How the disclosure process works
A COP9 disclosure normally moves through four stages. Timings and the depth of HMRC's testing vary case by case.
1. Outline Disclosure. Within the 60-day window, you set out the deliberate behaviour you are admitting, the taxes affected, the period covered, who else was involved, and how you benefited.
2. Opening meeting with HMRC. Following acceptance of the Outline Disclosure, HMRC normally requires a face-to-face meeting. Personal attendance is expected; the 2023 refresh of the Code is explicit that HMRC treats your attendance as a strong indication of your engagement with the investigation.
3. Disclosure Report and Formal Disclosure. In most cases a detailed Disclosure Report is prepared, setting out the irregularities, the figures and the methodology. The Formal Disclosure itself comprises four mandatory certified documents: a Certified Statement of worldwide assets and liabilities, a Certificate and Schedule of all financial accounts operated, a Certificate and Schedule of all financial cards operated, and a witnessed Certificate of Full Disclosure.
4. Testing and settlement. HMRC tests the disclosure and asks supplementary questions where necessary. Most cases conclude with a contract settlement covering tax, interest and penalties; where quantum cannot be agreed, HMRC may issue formal assessments instead.
1. Outline Disclosure. Within the 60-day window, you set out the deliberate behaviour you are admitting, the taxes affected, the period covered, who else was involved, and how you benefited.
2. Opening meeting with HMRC. Following acceptance of the Outline Disclosure, HMRC normally requires a face-to-face meeting. Personal attendance is expected; the 2023 refresh of the Code is explicit that HMRC treats your attendance as a strong indication of your engagement with the investigation.
3. Disclosure Report and Formal Disclosure. In most cases a detailed Disclosure Report is prepared, setting out the irregularities, the figures and the methodology. The Formal Disclosure itself comprises four mandatory certified documents: a Certified Statement of worldwide assets and liabilities, a Certificate and Schedule of all financial accounts operated, a Certificate and Schedule of all financial cards operated, and a witnessed Certificate of Full Disclosure.
4. Testing and settlement. HMRC tests the disclosure and asks supplementary questions where necessary. Most cases conclude with a contract settlement covering tax, interest and penalties; where quantum cannot be agreed, HMRC may issue formal assessments instead.
What you face: penalties, look-back period, and public listing
COP9 sits at the serious end of HMRC's civil enforcement.
Look-back period: Where HMRC accepts that the behaviour was deliberate, it can assess up to 20 years of historic tax, and longer where legislation exceptionally permits.
Penalties: Penalties under Finance Act 2007 Schedule 24 are tax-geared. For deliberate but not concealed behaviour, the statutory maximum is 70% of the lost revenue; for deliberate and concealed behaviour, 100%. Where offshore liabilities are involved, penalties can be significantly higher and in some cases exceed 200% of the lost revenue. The actual penalty depends on whether the disclosure was prompted or unprompted, the quality of the disclosure, and the level of cooperation.
Interest: Late-payment interest runs on the underpaid tax from the original due date.
Public listing: Where the potential lost revenue exceeds £25,000 and the case does not attract full mitigation of the penalty, your details may be considered for publication under HMRC's publishing details of deliberate defaulters regime.
Look-back period: Where HMRC accepts that the behaviour was deliberate, it can assess up to 20 years of historic tax, and longer where legislation exceptionally permits.
Penalties: Penalties under Finance Act 2007 Schedule 24 are tax-geared. For deliberate but not concealed behaviour, the statutory maximum is 70% of the lost revenue; for deliberate and concealed behaviour, 100%. Where offshore liabilities are involved, penalties can be significantly higher and in some cases exceed 200% of the lost revenue. The actual penalty depends on whether the disclosure was prompted or unprompted, the quality of the disclosure, and the level of cooperation.
Interest: Late-payment interest runs on the underpaid tax from the original due date.
Public listing: Where the potential lost revenue exceeds £25,000 and the case does not attract full mitigation of the penalty, your details may be considered for publication under HMRC's publishing details of deliberate defaulters regime.
How we work on COP9 cases
Engagements are led by Ghulam Alahi FCA, Managing Director, and Zaman Khan FCCA, Senior Manager. Vision Consulting is a London practive of chartered accountants and registered auditors with over 20 years' experience on Code of Practice 9 matters and other tax investigations.
The right response to a COP9 letter varies by case. Where deliberate behaviour has led to a loss of tax, a complete and accurate disclosure under the CDF is usually the route to a civil resolution; where it has not, rejecting the offer with a properly evidenced explanation may be the better course. Our first job is to work through the facts with the client so that the response reflects what actually happened.
The investigation can take a serious toll on a person's wellbeing. Hence we take this work personally and do everything we can to help our clients through it. Each case is handled with care. Senior attention throughout, correspondence and meetings with HMRC handled on the client's behalf, in-person attendance at HMRC meetings, an honest view of where the case actually stands, direct communication and confidentiality. Where the case calls for legal representation, we draw on established connections with London law firms and legal counsel. We act from our three London offices at The Gherkin, Cavendish Square and Gants Hill, and for clients elsewhere in the UK and internationally.
The right response to a COP9 letter varies by case. Where deliberate behaviour has led to a loss of tax, a complete and accurate disclosure under the CDF is usually the route to a civil resolution; where it has not, rejecting the offer with a properly evidenced explanation may be the better course. Our first job is to work through the facts with the client so that the response reflects what actually happened.
The investigation can take a serious toll on a person's wellbeing. Hence we take this work personally and do everything we can to help our clients through it. Each case is handled with care. Senior attention throughout, correspondence and meetings with HMRC handled on the client's behalf, in-person attendance at HMRC meetings, an honest view of where the case actually stands, direct communication and confidentiality. Where the case calls for legal representation, we draw on established connections with London law firms and legal counsel. We act from our three London offices at The Gherkin, Cavendish Square and Gants Hill, and for clients elsewhere in the UK and internationally.
Received a COP9 letter from HMRC?
At Vision Consulting, we have a specialist team with decades of experience handling COP9 and other HMRC tax investigations, led directly by our Managing Director Ghulam Alahi FCA, BA(Hons), MSc, BFP who has 25 years of experience in this field.
Speak with us in confidence.
Telephone: 020 8554 2135
Email: info@visionconsulting.co.uk
Speak with us in confidence.
Telephone: 020 8554 2135
Email: info@visionconsulting.co.uk
