This article explains the essentials of COP9 investigations and the Contractual Disclosure Facility (CDF), a process used by HMRC to investigate suspected tax fraud. It outlines the key stages of the investigation, from initial disclosure to potential penalties, and highlights the importance of professional advice to navigate the complexities and avoid criminal prosecution.

1. What to Do If You Receive a COP9 Investigation Letter from HMRC?
Receiving a COP9 investigation letter from HMRC can be unsettling. It means
HMRC suspects deliberate tax underpayment and has opened a civil
investigation under the Contractual Disclosure Facility (CDF), offering immunity
from criminal prosecution in exchange for full cooperation.
However, the information leading to this investigation may not always be
accurate.
Why Did I Receive a COP9 Investigation Letter?
A COP9 letter is sent when HMRC believes you or your business have
deliberately underpaid tax. The suspicion may come from sources like court
cases, disgruntled employees, or foreign tax authorities, but it may not always
be correct.

2. What is COP9 / CDF?
COP9 is HMRC’s method for investigating potential tax fraud or deliberate
wrongdoing, including reviewing up to 20 years of tax records. By accepting the
CDF, you agree to disclose all wrongdoing and avoid criminal charges, but
failure to comply can lead to prosecution.
Steps in the COP9 / CDF Process
1. Outline Disclosure: Within 60 days, you must admit any deliberate
wrongdoing. This is needed for CDF protection from prosecution.
2. Initial Interview: HMRC may request a face-to-face meeting, which
should be attended with professional advice.
3. Scoping Meeting: HMRC and your advisors will discuss the
investigation's scope and necessary actions.
4. Disclosure Report: Your advisors will submit a report detailing unpaid
taxes and penalties.
5. Testing and Negotiation: HMRC may challenge conclusions or ask for
further details, and your advisors will negotiate a fair settlement.
6. Penalties: Penalties for deliberate wrongdoing range from 35% to 100%
of the unpaid tax, or higher for offshore matters.
7. Contract Settlement: The case concludes with an agreed settlement,
including penalties.
8. Public Disclosure: HMRC may publish your details as a "deliberate tax
defaulter."

3. Can I Make a Voluntary COP9 / CDF Disclosure?
Yes, but you must make an upfront admission of wrongdoing. While this can
reduce penalties (usually to 20%), you should seek professional advice first.
How We Can Help
If you've received a COP9 letter, seeking tax investigation expert advice is
crucial. We help guide you through the process, negotiate with HMRC, and aim
for the best possible outcome.