COP8 specialist investigations

What COP8 signals

Code of Practice 8 is the code HMRC’s Fraud Investigation Service follows for a civil investigation where it is not using Code of Practice 9. A COP8 investigation means HMRC has allocated specialist resource to your affairs. HMRC says it investigates wherever it believes there may be a significant loss of tax; in practice that commonly means a technically complex case, substantial amounts, or arrangements HMRC regards as tax avoidance. It does not carry an allegation of fraud — that is what COP9 is for.

The distinction matters, but so does what it has in common with COP9: these are investigators who do this work full time, and the case has been selected deliberately.

What a COP8 letter usually contains

A COP8 enquiry begins in writing. HMRC’s published guidance indicates that the opening letter will usually:

• say that the Fraud Investigation Service is investigating under COP8, and provide a copy of the code
• give HMRC’s reasons, although it says it does not have to
• identify the issues it intends to focus on, which may later widen
• invite you to an opening meeting
• where relevant, include a Section 9A notice of enquiry into a Self Assessment return

If the check began elsewhere in HMRC, you or your adviser will be told that it now continues under COP8.

How a COP8 investigation usually runs

1. The opening meeting. Attending is voluntary, though the code treats meetings as part of co-operating. HMRC keeps a written record, and you can ask for a copy.
2. Information and documents. HMRC asks for what it needs. Where information is not provided voluntarily, it can use its statutory information powers, including to approach third parties.
3. Disclosure. Usually made at a meeting or in a follow-up letter from your advisers. HMRC does not usually ask for a formal disclosure report under COP8.
4. Settlement. If nothing is wrong, HMRC says so. Otherwise it seeks an agreed settlement of the tax, interest and penalties. Without agreement it can make formal assessments, which carry rights of review and appeal.

COP8 and COP9

Both codes are operated by the Fraud Investigation Service, and both are civil. COP9 is used where HMRC suspects fraud and comes with an offer of the Contractual Disclosure Facility; COP8 does not. Our COP9 page explains how to tell the two letters apart.

The line that can move

A COP8 investigation is not fixed in place. A COP8 enquiry can move to COP9 if HMRC comes to a different view of the conduct: the code says that if HMRC suspects or finds evidence of fraud, it may take a different approach, including a criminal investigation. It also warns that a statement or certificate you know to be false can lead to a criminal investigation. How the early exchanges are handled is therefore not only about the current investigation.

If a COP8 letter has landed

• Read what it actually does: the taxes, years and issues it names, any dates it sets, and whether it includes a notice of enquiry.
• Take advice before answering on the substance. The code says the decision whether to co-operate is yours.
• Keep every record, including computer records, and keep filing returns on time.

What we do

• Establish the scope of what is actually being investigated
• Take over correspondence and attend meetings with HMRC
• Work out the technical position properly before adopting one with HMRC
• Draft every response, and identify requests that fall outside the investigation
• Advise on disclosure where the facts warrant it, rather than by default
• Refer the matter on where it needs counsel or a larger investigations team