Glossary · UK
What is Code of Practice 9 (COP9)?
HMRC's civil investigation procedure for cases involving suspected serious tax fraud, offering taxpayers a Contractual Disclosure Facility in exchange for full cooperation and complete disclosure.
Full Definition
Code of Practice 9 (COP9) is the most serious civil compliance tool available to HMRC and is reserved for cases where HMRC suspects a taxpayer has committed deliberate tax fraud -- not merely negligence or carelessness. When HMRC opens a COP9 investigation, it writes to the taxpayer outlining the suspicions and offering a Contractual Disclosure Facility (CDF). Under the CDF, if the taxpayer accepts and makes a complete and accurate disclosure of all their tax irregularities (not just those HMRC suspects), HMRC gives a contractual undertaking not to pursue criminal prosecution for matters covered by the disclosure. Accepting the CDF does not guarantee a low penalty -- the taxpayer still faces civil penalties based on the amount of tax evaded, the behaviour involved, and whether the disclosure is prompted or unprompted -- but it avoids the risk of prosecution and imprisonment. If the taxpayer rejects the CDF or fails to make complete disclosure, HMRC can refer the case to its Fraud Investigation Service for criminal investigation. COP9 investigations can take several years, involve extensive document requests and interviews, and result in significant tax, interest and penalty bills. Anyone receiving a COP9 letter should immediately engage a specialist tax investigation solicitor or accountant with experience of COP9 cases.