HMRC are now taking a much harder stance in cases of fraud. Is that you?
New strategy Last summer HMRC carried out a consultation on the way investigations are settled. They have now published a revised Code of Practice (COP9) which can be read here . Pleasant bed-time reading it is not!
What is tax fraud? Usually - you think of fraud in terms of large sums of money but it can - and does - mean gaining any advantage, usually financial, by deception . HMRC will now categorise those who underpay tax into those who make mistakes and those who commit fraud with no middle ground.
Confession time If HMRC suspect deliberate, unfair tax avoidance, a COP9 will be issued. This includes a "contractual disclosure facility" (CDF) form where you confess all instances where you have unfairly dodged tax. If they are satisfied with your response, they will not prosecute you. If you don't make a full confession, they will be much harsher.
It will be some time before we know how HMRC will apply this new strategy . Will COP9 be automatically issued in every tax enquiry?
TRAP If you receive a COP9, don't ignore it. If you don't rely within 60 days, HMRC will treat this as non-co-operation. Contact me or your tax adviser immediately.
TIP Don't let HMRC bully you into signing a COP9. If you do, you will be admitting deliberate, unfair tax avoidance and HMRC will automatically charge higher enalties if you have underpaid tax.
A blog providing UK tax information and planning ideas from John Pointon, Accountant, Business and Tax Consultant. Please send any suggestions for topics you would like to see covered to me at jpointon@gmail.com or 34 Lightley Court, Sandbach, Cheshire, CW11 4QA or phone 01270 763 466.
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