HMRC’s Fraud Investigation Service (FIS) conducts civil and criminal investigations across all areas of tax, and is staffed by many of HMRC’s most able and experienced investigators.
The unit was part of the former HM Inland Revenue and consisted of investigators who conducted civil and criminal investigations. With the formation of HMRC, the civil and criminal investigations teams were split into two distinct units (Criminal Investigations and Special Civil Investigations). These units were remerged in 2015 to create FIS. As a result of HMRC’s failure to undertake successful prosecutions where there was evidence of fraud or deliberate behaviour or dishonest conduct involving large sums of money.
For Civil Investigations, the main areas FIS is well known for are enquiries conducted under:
Regardless of which Code of Practice is issued, it is a potentially serious issue for FIS to be involved and appropriate specialist professional advice is highly recommended.
HMRC’s COP9 leaflet strongly recommends a person seeks independent professional advice.
FIS has since increased staff numbers and expanded its remit in response to areas that HMRC believes to be experiencing large losses of tax take and now includes:
Our Tax Investigations and Dispute Resolution team includes a number of former HMRC FIS investigators with extensive experience of handling FIS investigations, in both HMRC and private practice.
Get in touch with one of our tax investigations experts today for a free, confidential consultation.
FIS will notify the taxpayer that it has commenced a COP8 investigation and normally explains the reasons for the enquiry, even though it does not need to do so. During a COP8 investigation, FIS may choose to change their approach, where it suspects or finds evidence of fraud or deliberate or dishonesty. In those situations, HMRC may decide to conduct an investigation under Code of Practice 9 (COP9) or a criminal investigation under the Police and Criminal Evidence Act 1984.
COP8 investigations can be very intrusive from both a personal and business perspective, as FIS investigators may as part of their enquiries seek information and documents from the taxpayer, third parties (including financial institutions) and overseas Tax Authorities.
Get in touchThere has been a steady rise in the number of investigations conducted under Code of Practice 8 (COP8).
Only HMRC’s Fraud Investigation Service Unit conduct COP8 investigations, where fraud, deliberate behaviour or dishonest conduct is not suspected, or, where COP9 is not deemed appropriate or involves what HMRC refers to a ‘bespoke tax avoidance’.
A COP8 enquiry can cover a number of years and all types of taxes, regardless of whether or not the time limit to open an enquiry into a return has elapsed. As part of a wider HMRC enquiry, FIS may instead undertake a COP8 enquiry into a specific issue with other non-FIS teams dealing with other issues.
HMRC has limited resources to conduct criminal investigations in every case, where it suspects fraud or deliberate behaviour or dishonest conduct. As an alternative, HMRC may therefore choose to investigate using the procedure known as the Contractual Disclosure Facility (CDF) under Code of Practice 9 (COP9).
The purpose of CDF is to provide an opportunity for the person under investigation to disclose all tax irregularities to HMRC. In doing so, HMRC guarantees not to pursue a criminal investigation for any tax offences that have occurred. However, where a person makes a partial disclosure, or denies any tax irregularities, HMRC retains the right to criminally prosecute for deliberate behaviour, fraud or dishonest conduct.
It is important to understand that HMRC will only undertake COP9 where the amounts of duty it believes to be at stake is significant or the seriousness of the offence is great. It is not a process HMRC embarks on lightly.
Our Tax Investigations and Dispute Resolution Service includes former HMRC FIS investigators with an extensive experience of CDF and COP 9 process in both HMRC and private practice.
Get in touch with one of our tax investigations experts today for a free, confidential consultation.
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