Code of Practice 9 investigations are also known as Contractual Disclosure Facility (CDF) investigations. The CDF is a process that allows taxpayers to disclose any irregularities in their tax affairs in exchange for a reduced penalty. This process is designed to encourage voluntary disclosure and cooperation with HMRC.
HMRC will send a letter to the individual or the company suspected of tax evasion, offering them the opportunity to participate in the CDF process. This letter is known as the COP 9 letter.
The COP 9 letter will inform the recipient that they are suspected of committing a tax offence and that HMRC has evidence to support this. The letter will also provide details of the CDF process and the penalties that may be imposed if the individual or company does not cooperate.
If the recipient decides to participate in the CDF process, they will need to provide a full disclosure of their tax affairs. This disclosure must be complete and accurate and must include any irregularities or omissions. The disclosure will be reviewed by HMRC, and if they are satisfied that it is complete and accurate, they will offer a settlement.
What are the penalties?
The settlement may include a penalty, which will be based on the severity of the offence and the level of cooperation provided by the individual or company. If the recipient does not participate in the CDF process or does not provide a complete and accurate disclosure, HMRC may initiate a criminal investigation.
COP 9 investigations can be a daunting experience, and it is essential that individuals and companies seek professional advice if they receive a COP 9 letter. It is important to remember that participating in the CDF process can be beneficial, as it can result in a reduced penalty and may avoid the need for a criminal investigation.
Code of Practice 9 investigations are a tool used by HMRC to investigate suspected tax offences. The CDF process is designed to encourage voluntary disclosure and cooperation and can result in a reduced penalty. It is important for individuals and companies to seek professional advice if they receive a COP 9 letter, and to participate in the CDF process if appropriate.