Specialist investigation for fraud and bespoke avoidance – COP 8

COP 8 deals with bespoke tax avoidance. Bespoke Tax avoidance has become the discussion of the masses.

Whether it is about the tax structure of multinationals or the tax avoidance scheme used by dentists, the point will be the same – this is a complex area.

We can provide a highly technical analysis of the strategic options available, with a focus on commerciality.

Ordinarily, HMRC’s objective when issuing code of practice 8 (COP8) is to achieve a financial recovery of any tax, interest and penalties owed. HMRC does not issue code of practice 8 with a criminal investigation in mind. However, if HMRC forms a suspicion or finds evidence of serious fraud, it may instigate criminal proceedings.

HMRC operates code of practice 8 where it believes there has been a “deliberate attempt 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”.

The scope of a code of practice 8 may therefore only be limited to a particular area, for example the use of a tax planning scheme. This does not necessarily mean the enquiries will be restricted to that area as time progresses. HMRC is likely to want to consider your overall level of compliance.

Where people believe they may not have paid all the taxes that they owe, and would like to sort out their tax affairs, requesting the issue of a COP 8 may be appropriate. It may be that existing enquiries would be better managed under the code of practice.

If you have received a letter issuing code of practice 8, have an ongoing and complicated enquiry or wish to make a disclosure, you should seek specialist assistance. In fact, HMRC strongly suggests that a specialist adviser is appointed to assist with the enquiry. To find out how we can help, please contact us.