Learn more about HMRC Code of Practice 8 (COP8)

COP8 Tax Investigation Services

HMRC’s laser focus on tax recovery takes a notable shift when they suspect a significant tax deficit but have no grounds to attribute it to fraud. In such instances, they initiate an in-depth investigation under the auspices of Code of Practice 8 (COP8). This procedure predominantly targets taxpayers believed to have engaged in intricate tax planning systems or possible tax evasion schemes. The Fraud Investigation Service teams from HMRC carry out the probing for COP8 cases.

Should a tax evasion scheme gain publicity, perhaps through an advisor’s promotion, a multitude of individuals might avail themselves of the same strategy. HMRC often opts to meticulously investigate only a handful of these taxpayers but extrapolates the results to cover all scheme participants.

Taxpayers employ these planning structures and evasion schemes with the intention of legally reducing their tax obligations. This often necessitates a specific interpretation of the relevant tax laws and potentially leverages legislative loopholes or offshore setups.

HMRC’s Tactics in Code of Practice 8 Scenarios

HMRC relies on two primary tactics to investigate alleged tax planning structures and evasion schemes. One approach centers on contesting the taxpayer’s interpretation of the tax law, upon which the efficacy of the scheme hinges. Such disputes often lead to in-depth technical debates on the precise interpretation of tax legislation. When neither party manages to convince the other of their viewpoint, the case moves to the independent Tax Tribunal, an entity established to resolve tax conflicts.

The alternative approach sees HMRC scrutinizing the execution of the tax planning. Most schemes require strict adherence to a series of steps to succeed in the intended tax evasion. HMRC scrutinizes each step meticulously, requiring concrete evidence of its correct execution before accepting the scheme’s success. Even the slightest deviation from the planned procedure can serve as an opportunity to dismantle the scheme.

In the majority of COP8 scenarios, HMRC employs both strategies simultaneously to challenge the proposed tax planning. Unlike COP9, the COP8 procedure does not offer the opportunity for a Contractual Disclosure Facility (CDF) and is not about tax fraud. However, it is essential to understand the implications, responsibilities, and consequences of a COP8 investigation.

Our Services

We offer a broad range of services to assist you during a COP8 investigation. These include:

Initial Consultation

The process starts with a confidential, detailed consultation. This interaction allows us to grasp your unique situation and the specifics of your case. We will discuss the implications of a COP8 investigation, elucidate the procedure in detail, and clarify any doubts. Based on this comprehensive understanding, we then strategize the most effective course of action to address the investigation efficiently.

Representation

Our experienced team will represent you throughout the entire investigation process. Leveraging our extensive understanding of tax laws and COP8 procedures, we handle all communication with HMRC on your behalf. Our experts present your case, respond to queries, and deal with any complications that emerge during the investigation.

Review and Analysis

A crucial aspect of the COP8 process involves a thorough review and analysis of your tax affairs. Our team will assist you in collating pertinent information, meticulously examining your tax records, and identifying any potential areas of contention. Our rigorous approach minimises the chances of additional queries or complications, ensuring a seamless process.

Negotiation and Settlement

The COP8 investigation culminates in negotiating a settlement with HMRC. This phase can be complex and challenging, necessitating an in-depth understanding of tax laws and negotiation strategies. We will work diligently to achieve a settlement that accurately reflects your tax position. Our negotiation strategy concentrates on minimising potential liabilities, ensuring an outcome that is as favourable to you as possible.

Don’t face the complexities of a COP8 investigation alone. Let our team of experts guide you through the process, protecting your interests and striving for the best possible outcome.