COP9 Letter from HMRC

Individuals likely to be identified as tax evaders, are those living in areas with the greatest number of concentrated wealthy people such as Nottingham, Cheshire and Edinburgh.

Unlike recent amnesty campaigns this push will see COP 9 letters dropping through the letterboxes of some of the rich and famous as well as a few surprisingly quiet living people who mask tax fraud with offshore bank accounting, foreign property and visits to casinos. Many are living double lives, often with dual passports and their being identified is in part due to the Connect spyware used by HMRC for some time now.

This sophisticated spyware can detect how much we spend at ordinary shops like Tesco and what we spend our money on, as well as drawing information from upmarket designer outlets like Harvey Nichols and Harrods. The scope of surveillance extends to membership of exclusive golf clubs for rich men and women and to the showrooms of the supercars driven by drug dealers, as well as sports personalities and well-heeled business people.

The network of spying doesn’t however take place exclusively indoors and undercover surveillance is taking place on the streets and restaurants by teams assembled from HMRC, DSS, Border Control and the Police

The gambling habits of the rich, as well as social and charity events where comedians, footballers, and TV personalities turn up for late night speeches, and are often paid in cash, are among the ‘off record’ tax evasion areas now being looked at.

The COP9 letter starts with the alarming statement ‘I am writing to you because I have reason to believe that you have committed tax fraud.’

The letter goes on to explain the mechanisms of COP9 (which stands for Code of Practice 9) and sets out how the Revenue investigates tax fraud and “how it applies to your tax affairs”

Under the arrangement offered it goes on to explain how you are promised that if you make a full disclosure the Revenue will not start a criminal investigation with a view to prosecution.

This is known as being offered entry into a Contractual Disclosure Facility (CDF) but the offer does not apply to any other offences which you do not disclose. You are offered a period of 60 days in which to either accept or reject the offer.

Such letters are sometimes sent to the least suspecting individuals and as well as sending an immediate shiver down the spine they cause panic and alarm and have the potential to give the receiver countless sleepless nights.

This is the point at which an ordinary tax advisor or accountant is completely out of their depth and a specialist COP 9 defence advisor is required.

Typically the Revenue will have decided that the person being accused of tax fraud is going to be due them over £100,000 and often the eventual settlements are in high six figure sums. Occasionally they are in the millions. These figures are calculated to include the lost tax, interest and penalties.

These cases might go on for years and the cost of fees can be prohibitive and often leads to properties being sold to clear the tax debt. Unfortunately, being a target of suspected fraud, often takes its toll on the health of the accused taxpayer.

The Revenue will often know almost everything about a taxpayer who they may have been spying on for some time, just waiting for the extra little titbit of evidence needed to prove high personal wealth has been gained at the expense of the law abiding taxpayer.

In some cases the evidence provided by lawyers in acrimonious divorce cases is used to put a picture together of a person having children at private schools, driving a Supercar, ordering expensive bottles of champagne and eating in the best restaurants.

The picture is completed with the detection of countries travelled to and the possibility of offshore bank accounting and foreign properties.

Add to that the revelations that emerge through the pressures put on the accused at interviews and there is likely to be all sorts of secrets spewed out by the most seemingly robust and thick-skinned individuals.

Bizarrely, those making large charitable donations often have lifestyles which do not match tax returns filed, but it is not just the famous who come to the attention of the specialist investigators. Little old ladies and gentlemen who attend church and seem to be living frugally can also attract attention in the world of underground spyware.

Sacked employees, jealous neighbours and wronged ex-wives, can also be the informers who Her Majesty’s men listen to with all ears.

Our specialist COP9 tax specialists have handled many cases over the years. Steedman and Company can offer you a free consultation with one or more members of our tax investigation team who can assess your situation. They will be able to offer several strategies to deal with your tax issue effectively and take the weight of your shoulders.

If you’ve received a letter from HMRC outlining their grounds for a possible tax investigation always remember: Call us before they call you.