Civil Investigation of Fraud (CIF)

The taxman's Code of Practice 9 tax investigations are the most serious and worrying of all tax enquiries (apart from criminal prosecutions).  COP 9 is titled:  Civil Investigation into Cases of Suspected Serious Fraud.  It is used where HMRC believes it has strong evidence of tax being underpaid due to deliberate and serious fraud, but has decided not to prosecute - if the target taxpayer admits to all tax irregularities and tells the taxman all the details by way of a Full Disclosure Report.

COP9 investigations are carried out by only two specialist units in HMRC; either the regional Civil Investigation of Fraud units or the elite national Specialist Investigations teams.  Both are staffed by highly trained, experienced and committed tax fraud investigators.  They conduct tax investigations into Suspected Serious Fraud (i.e. tax evasion).  Code of Practice 9 Civil Investigation into Cases of Suspected Serious Fraud enquiries can cover all taxes:  Corporation Tax, Income Tax, Capital Gains Tax, PAYE and VAT.  The CIF teams are part of Her Majesty's Revenue and Customs Local Compliance network: but are encouraged to use more of the Revenue's hard-hitting powers than the other inspectors in that network. 

The regional CIF teams only issue COP 9 where they anticipate collecting over £75,000.  Penalties in most COP 9 cases will range from 35% to 200% of the tax the inspector thinks has been evaded.   Lower penalties are charged where a high quality Disclosure Report is prepared.

The Civil Investigation of Fraud team leader will typically be a very experienced and senior HM Inspector of Taxes: usually with a long and successful track record in Specialist Investigations.  He will have reviewed the case (often from the Risk and Intelligence teams that gather external data, or an existing tax enquiry referred from the Local Compliance Small and Medium Enterprise team) and have decided that there is strong evidence of serious tax evasion.  The CIF team will then carry out detailed background checks and a large scale information gathering exercise before issuing COP9 and requesting the initial (and crucial) Opening Meeting.

As well as access to the full range of HMRC powers CIF are very well resourced in terms of manpower, qualified accountants, data interrogation experts and specialists in Corporation Tax, Income Tax, VAT, PAYE and NIC.

A badly managed Civil Investigation of Fraud (CIF) case can lead to much higher penalties and a long running and deeply intrusive investigation, which often results in serious damage to the running of the business, and the proprietor's health and relationships.  Where the tax investigator thinks a materially incomplete disclosure has been made they may prosecute.  If the CIF team are not happy with the quality of the Disclosure Report the taxpayer will be "named and shamed".  Poor quality Disclosures also increase the risk that CIF will put the taxpayer on the Managing Deliberate Defaulters programme: a form of tagging whereby the Revenue will keep the taxpayer under increased scrutiny for the 5 years after the end of the tax investigation.

Lynam Tax Enquiry Experts have experience of proving to the CIF teams that a good number of COP 9 cases were investigated for incorrect reasons, and we've had a number of cases closed with no additional money to pay.  However, most Civil Investigation of Fraud cases are based on solid evidence, and need to be treated seriously.  It is essential you take proper advice from qualified and experienced professionals.

COP 9 offers the chance to avoid both prosecution and naming and shaming, and to keep penalties right down - but it does require you to produce a detailed Full Disclosure Report.  A thorough and professional COP9 Disclosure Report will keep you out of prison, massively reduce your penalties and keep down the disruption to your personal and business life.  A badly prepared report increases your risks.  Civil Investigation of Fraud investigations can be very intrusive and stressful. The procedures are clearly set out in HMRC Code of Practice 9 but have many pitfalls for the inexperienced and unwary.  If CIF are not happy with the Disclosure Report adviser they will commence their own investigations - which usually drag on for many years.  HMRC themselves recommend that recipients of COP 9 should engage a specialist to help them.

How will Lynam Tax Investigation Experts help me?
Lynam Tax Investigation Experts have vast experience of successfully dealing with Civil Investigation of Fraud cases; relieving their clients’ stress and negotiating optimum outcomes.  We can help you save tax, interest and penalties.  We can help you avoid a criminal investigation.  We can help keep you off the Tax Offenders Register.  We can save you years of stress, worry and disruption.

Nb. If you, or your client, have received an HMRC Code of Practice 9 then you need specialist help right now.  Do not delay.

*For a free and totally confidential discussion,

Call Paul Lynam now: on 0845 643 9997