There are three main types of tax investigation that are carried out by HMRC. These are often referred to as a Section 9A enquiry, a Code of Practice 8 (COP8) and Code of Practice 9 (COP9).
They are not criminal investigations and don’t always lead to criminal prosecution. However, HMRC can start criminal investigations and prosecution if you don’t comply or they find evidence of serious offences.
Section 9A enquiries are used by HMRC to review information entered on your self-assessment tax return. These can relate to a particular aspect of your tax return or a random review of your submission. They are usually conducted through written communication with HMRC.
COP8 investigations are used if HMRC suspects you of tax avoidance or minor fraud. They usually involve a series of informal meetings and correspondence between you and HMRC to identify any underpaid tax.
COP9 investigations are used when HMRC suspects you of serious fraud but hasn’t started a criminal investigation. You must give HMRC a detailed report about your tax affairs, as well as anything you’ve done – deliberately or not – that has caused any irregularities.
Once the investigation has settled on a value for any unpaid tax (including interest), you and HMRC negotiate a penalty payment based on your behaviour before and during the investigation. You will pay less of a penalty if you are helpful and cooperative.
