HMRC’s Code of Practice 8 Tax Investigations are targeted at marketed tax avoidance schemes and higher value stand-alone enquiries.

Code of Practice 8 Tax Investigations, sometimes referred to as COP8, are staffed by highly experienced and trained HMRC officers who have small caseloads and ample support staff, including qualified accountants and computer forensic experts, all of which allows them to devote considerable time to your case.

Marketed tax avoidance schemes are usually “off-the-shelf” products where HMRC considers the arrangements to be artificial or contrived. Often HMRC will claim the commerciality of the claimed transactions to be of marginal purpose. Other characteristics likely to provoke interest from HMRC are structures with an overseas element or a narrow interpretation of the tax legislation which purports to exempt income or capital gains from the scope of taxation.

Higher value stand-alone enquiries are usually where there are novel, unusual and complex situations where the likely yield of tax, interest and penalties is over £500,000. There is also a risk that a COP8 tax investigation may turn into a criminal prosecution and great care is needed to ensure a civil investigation does not become a tax fraud case, as COP8 does not include an agreement from HMRC not to pursue a criminal investigation.

As a consequence, dealing with your own COP8 Tax Investigation without your own specialist support would be hazardous with a greater risk of criminal prosecution, or naming and shaming, and a heavier level of tax and penalties being claimed by HMRC. It will also be extremely time consuming for you.

At Ritchie Phillips, our specialist team will help you gather and present your evidence to rebut the claims of HMRC and persuade the sceptical HMRC officers of the merits of your case, or to concede at an early stage any unarguable points and mitigate any claims for penalties and other sanctions by HMRC.