The HM Revenues and Customs (HMRC) launches a Code of Practice 8 investigation in cases of suspicion over loss of large amounts of tax. The investigation is initiated in situations where the HMRC suspects loss of taxes not resulting from a deliberate tax fraud. Therefore, the investigation is not proceeded with in form of a criminal procedure. However, if the department finds any evidence against a particular person raising suspicion of deliberate fraud, then the HMRC has the liberty to initiate a Code of Practice 9 investigation against the said person.
The Code of Practice 8 investigations are typically launched around those people who have engaged in tax avoidance schemes or practices. The HMRC’s Specialist Investigation teams are put in charge of handling and probing the COP8 cases. The HMRC follows a typical procedure of investigating a sample of tax avoidance participants in cases where a large number of tax payers are involved in a particular scheme launched by a tax advisor, however the results of the investigations are applied to all the tax payers participating in the said tax avoidance scheme.
In order to carry out the COP8 investigations, the HMRC can adopt two methods –
- Challenge the interpretation of the legislation that supports the success and basis of the scheme implemented via a thorough and detailed research and argument against the legislation.
- Challenge the implementation technique of the scheme in question.
In case an individual has been approached with a COP8 investigation, Churchill Tax Advisers have a team of experts to take the matters into complete control. At Churchill Tax Advisers we make it our priority to guide our clients through entire process from start to finish with a detailed guidance system for each step.