Possibly in response to the Pandora Papers,[1] in response to which HMRC published a press release urging taxpayers to ‘come clean’ and correct their tax affairs,[2] HMRC issued an updated COP9 on 14 June 2023.

Before turning to the revisions to COP9, let us look at the structure of this facility. Investigations are undertaken by FIS officers, who are fully trained fraud investigators. In advance of writing to the taxpayer to tell them that HMRC suspects tax fraud has been committed by them, FIS officers would have already built up considerable intelligence to the extent that they consider the taxpayer could be prosecuted. COP9 is a one-time offer from HMRC that requires the taxpayer to admit that they have engaged in deliberate tax fraud. The taxpayer must also agree to disclose and correct all tax irregularities for the past 20 years.

Admitting tax fraud to HMRC is a serious matter as it has consequences beyond the COP9 procedure. Where someone has admitted to deliberate tax fraud, HMRC will keep a close eye on them in the future and, indeed, has regimes specifically for that purpose. The Managing Serious Defaulters programme is one such regime and entails HMRC closely monitoring all aspects of the defaulter’s tax affairs. Publishing the taxpayer’s details is another consequence.

Given the seriousness of COP9, HMRC recognises that the taxpayer is entitled to specialist representation and it is important they are supported through the process by an appropriately qualified advisor with direct experience of COP9. HMRC will offer the taxpayer the opportunity to correct all of their tax affairs through the Contractual Disclosure Facility (CDF), which is essentially a report to HMRC detailing all of the tax irregularities over the past 20 years, how they occurred and a calculation of the tax, interest and penalties due together with various certifications signed by the taxpayer. HMRC allows the taxpayer to commission an advisor to prepare the CDF report on their behalf, which is then formally adopted by the taxpayer. Only advisors who are investigation specialists with direct experience of COP9 ought to be used for the preparation of the CDF report.