Serious fraud – updated COP9 leaflet
HMRC have updated their code of practice leaflet which outlines their procedures for investigations into serious fraud. The leaflet, COP9, now reflects the new appeals process and penalty changes which both took effect from 1 April 2009.
The updated code of practice (COP) covers both direct and indirect taxes and explains that COP9 investigations are conducted with a view to the imposition of a civil penalty for fraudulent conduct.
Investigations of this type by HMRC are designed to ascertain the full facts of a case and to collect any tax liabilities, penalties and interest deemed owing in cases of fraudulent conduct. The leaflet contains a guarded warning that HMRC will only deal with professional advisers who are suitably experienced in dealing with COP9 style investigations.
The updated leaflet makes it clear that penalties may be incurred in respect of periods both before and after the introduction of the new rules on 1 April 2009. The amount of penalties that can be incurred and the possible mitigation of any penalties differ significantly between the ‘old’ and ‘new’ rules.
Where agreement cannot be reached HRMC may issue a formal determination of tax and or penalties. This formal determination can be appealed to the new first-tier Tribunal with effect from 1 April 2009.