HMRC Fraud Investigation Service – Code of Practice 8

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HMRC Fraud Investigation Service Code of
Practice 8
https//theaccountancysolutions.com/hmrc-cop-8/
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What is Code of Practice 8?
Code of Practice 8 allows the FIS to begin
investigations regardless of whether any tax
avoidance claims have been raised against the
suspected perpetrator. Tax affairs are kept under
the strictest confidence and may involve looking
through tax returns or other tax
documentation. During an investigation, the FIS
may require face-to-face meetings with the person
or business. Legal representation may be sought,
whether that be from an accountant or legal
practitioner (or both). The FIS have the right to
visit business premises to access company records
and look for physical evidence of fraud. If
omissions are discovered then they will need to
be paid, plus interest and penalties. If the
omission was found to be purposeful, perhaps by
way of a tax avoidance scheme, the penalty can
range from an additional 15-100 of the underpaid
tax amount. Inadvertent or accidentals mistakes
usually have lesser penalties. If you are found
to have done nothing wrong, you will be informed
that the investigation has been completed and no
further action will be taken. You may be
susceptible for repeat investigations in
subsequent years if further suspicious tax data
is received.
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What does Code of Practice 8 mean for
individuals?

• From an individuals point of view, if you are
  faced with an investigation under Code of
  Practice 8 then you should always comply with
  what is being requested of you. It is highly
  recommended that you liaise closely with your
  accountant to answer all HMRCs questions in an
  accurate, timely manner.
• An investigation can be very costly due to the
  additional cost of accountants and legal
  representation but also in terms of the time you
  may be required to take away from your business.
  Some types of business insurance can help to
  minimise this cost or entitle you to claim
  relevant expenses back through the insurance
  company once an investigation has been completed.
• If you are worried about getting in to trouble
  because of a slight mismatch on your tax return,
  you probably dont need to worry about this piece
  of legislation. Code of Practice 8 investigations
  are usually only started if the suspected
  avoidance is at least 500,000 due to the amount
  of time and resources it takes to compete them.

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What does Code of Practice 8 mean for
accountants?

• If one of your clients is undergoing an
  investigation, you may be required to submit
  evidence on their behalf. This might include
  creating reports of income and expenditure and
  comparing this to the relevant years tax
  returns.
• You may be required to help negotiate final
  settlements and time to pay, as well as dealing
  with requests for information. If you are hired
  by a client to help with their investigation but
  you have not previously worked with them, you may
  have to liaise with their previous accountancy
  firm to ascertain the issues with their taxation
  documents.
• Civil investigations into tax liability and fraud
  are a major part of the FIS duty and should be
  taken seriously. Whether you are an individual or
  an accountant, Code of Practice 8 investigations
  can be lengthy, expensive and complicated.
  Understanding the worst-case scenario can often
  be the best way to approach an investigation if
  only so that you can stop it from getting to that
  stage.
• If you have received a letter from HMRC regarding
  COP 8 please contact The Accountancy Solutions on
  01216297768 or 02070784001 for further advice. We
  are accountants specialist in conducting and
  negotiating inquiries and investigations with
  HMRC.

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