HMRC Contract Disclosure Facility

HMRC Contract Disclosure FacilityThis article looks at the ‘outline disclosure’ aspect of HMRC Contract Disclosure Facility.

What Is A Contract Disclosure Facility ‘Outline Disclosure’?

You will be issued with the outline disclosure documents in one of two scenarios. A) You or your agent has applied for immunity from prosecution under the Contract Disclosure Facility. B) HMRC suspects that you have committed ‘serious tax fraud’. In this case HMRC has chosen to offer you immunity from criminal prosecution in return for a full disclosure. Full disclosure means giving all information concerning deliberate and non-deliberate tax irregularities.

Contained within the outline disclosure letter there are two key documents. The first is an acceptance notice, the second is a rejection notice. Whether you believe that you have committed tax fraud or not, a CDF letter from HMRC should never be ignored. If you ignore HMRC’s letter, then it will likely commence a criminal investigation into your tax affairs.

What is Code of Practice 9 (COP9)?

Code of Practice 9 is the official name of the procedure that HMRC uses to offer the Contract Disclosure Facility.

The terms ‘CDF’, ‘Contract Disclosure Facility’, ‘COP9’ and ‘Code of practice 9’ are often used interchangeably.

HMRC publishes a COP9/CDF help booklet that can be found by clicking here. As you can see, HMRC itself recommends using an advisor when entering into COP9.

60 Days – An Important Deadline

The 60-day deadline is strict and is the only firm deadline applicable to the COP9 process.

From the date of receiving the HMRC Contract Disclosure Facility offer letter you will have 60 days to take action. You need to either return the rejection notice (if you believe you have done nothing wrong) or acceptance notice along with the outline disclosure documents. HMRC will then write to you in due course confirming your decision.

What Do I Need To Tell HMRC? What If I Don’t Disclosure Everything?

The offer of immunity from criminal prosecution only applies to irregularities identified in the outline disclosure. HMRC reserves the right to undertake a criminal investigation in respect of anything undeclared in the outline disclosure itself. Therefore, it’s extremely important that the COP9 outline disclosure contains details of all deliberate and non-deliberate inaccuracies.

How Much Detail Should I Go Into?

It’s more important that all irregularities are at least identified in the outline disclosure than it is to go into significant detail. Your advisor should walk you through the documents and advise on the level of detail that needs to be included. However, your outline disclosure documents should not be deliberately vague. This could result in increased penalties when HMRC come to assess your overall liability – see ‘telling, helping and giving’.

Submitting the HMRC Contract Disclosure Facility Outline Disclosure – What Happens Next?

Once the outline disclosure documents have been submitted, HMRC will then confirm receipt. Approximately 3 to 6 weeks later HMRC will then confirm that it will not be proceeding with a criminal investigation in respect of anything contained within the outline disclosure – assuming the documents were completed correctly. Should HMRC feel that it has additional information, not in the outline disclosure, then the acceptance letter will state this.

At this point immunity from criminal prosecution regarding your tax affairs is in place. Your advisor should now focus on working with you to submit the ‘full disclosure’.

Moving Forwards

If you have any questions regarding the outline disclosure of CDF/COP9 process in general, then please don’t hesitate to contact us using the ‘Contact Us’ link on our website – www.tmsterling.co.uk

COP9 (Code of Practice 9): Everything You Need To Know

COP9Code of Practice 9

If you need to make a disclosure regarding your taxes or have been prompted to do so then it’s likely to be under of Code of Practice 9. Although COP9 can sound complicated, it needn’t be, and has one valuable benefit.

What is COP9? Does COP9 have any advantages?

It’s important to note that a COP9 investigation is one of the most serious types of investigation. A Code of Practice 9 case is only one step down from full criminal investigation. Therefore, it’s important to appoint a COP9 professional to aid you in the COP9 process as soon as possible. However, a COP9 investigation can offer a distinct advantage to the taxpayer involved.

An investigation carried out under COP9 offers the taxpayer suspected of fraud immunity from criminal prosecution. In return, HMRC expects a full and honest disclosure regarding their tax affairs. The investigation can be initiated by either HMRC or the taxpayer themselves.

If HMRC suspect someone of serious tax fraud then will issue the taxpayer with Code of Practice 9 notice. The taxpayer will then have 60 days, in which time they are either required to deny the allegations and therefore the offer of protection from prosecution, or admit to carrying out of tax fraud and complete the ‘outline disclosure’ – outlining their activities in general terms.

If you wish to make a disclosure regarding tax fraud, whilst being protected from criminal prosecution, then this can be done by applying to HMRC to make a disclosure under the ‘CDF’ (contacted disclosure facility). Again, you will then have 60 days to either accept or decline the contract once issued. This should not be undertaken without the guidance of a professional.

How long will a COP9 investigation/disclosure take?

Due to the individual and complex nature of Code of Practice 9 cases, this is almost impossible to answer. Some cases can take several months, some several years.

However, instructing a professional can not only help reduce the time required to complete the process but can also reduce the amount of stress and work required on the tax-payer’s behalf. For example, we undertake all dealings with HMRC and compile the final report on our client’s behalf. This means that our clients simply need to provide the required information and ‘adopt’ the report once completed.

What will happen if I refuse the offer of  a Code of Practice 9 disclosure?

Refusing HMRC’s offer to make a disclosure under COP9 can have extremely serious consequences. If you refuse the CDF (contractual disclosure facility) and HMRC subsequently uncover activity that is considered ‘serious tax fraud’ then they may pursue a criminal prosecution – potentially resulting in imprisonment.

No attempt should ever be made to deliberately conceal information regarding unpaid tax liabilities.

If you have any questions regarding your own tax affairs, believe that you may wish to make a COP9 disclosure or have received a COP9 letter from HMRC, please contact us for further advice.

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