Code of Practice 8 investigations

Code of Practice 8 tax investigations (“COP 8”) are investigations by HMRC into complex tax avoidance, rather than tax evasion which will be dealt with under Code of Practice 9 or by way of a criminal investigation. COP 8 investigations are begun where HMRC suspect that there has been a deliberate attempt by a taxpayer to pay less than the correct amount of tax, or to take advantage of a scheme or device to reduce or eliminate a tax liability. In such cases, HMRC will launch an investigation under COP 8 with the objective of recovering any outstanding tax, together with interest and penalties. Whilst this is not undertaken with a criminal investigation in mind, if they suspect or find evidence of serious fraud, HMRC may take action under Code of Practice 9 or instigate criminal proceedings.

COP 8 investigations are conducted by the Fraud and Avoidance section of the Specialist Investigations directorate of HMRC and, as explained in the COP 8 booklet issued by HMRC to taxpayers, COP 8 applies to all investigations where the Civil Investigation of Fraud procedures (Code of Practice 9) are not used.

COP 8 investigations are taken extremely seriously by HMRC. As explained in the COP 8 booklet:-

“Most taxpayers pay what is due and others make genuine mistakes. Some, however, deliberately try to pay less than the correct amount or take advantage of a scheme or device to reduce or eliminate a liability that might otherwise be due. If we suspect this, we will investigate thoroughly to establish the facts. We do not conduct investigations under this Code of Practice with a criminal prosecution in mind but towards a financial recovery of any tax, interest and penalties you owe. We may adopt a different approach if we suspect or find evidence of serious fraud at any time during our investigation. We may then deal with the investigation either under our published Code of Practice 9 or, if it is being conducted with a view to criminal prosecution, under the Police & Criminal Evidence Act 1984 and the Criminal Procedure & Investigation Act 1996 and their respective Codes of Practice.”

Taxpayers faced with a COP 8 investigation need protection.  There is no substitute for experience when dealing with HMRC Levy & Levy have immense experience in this area and an in-depth knowledge of how HMRC investigators approach and deal with COP 8 investigations. Investigations into suspected tax avoidance can be immensely stressful and time consuming for taxpayers and we can help to minimise the business and personal disruption that these investigations can cause.