Code of Practice 9 and the CDF

Under the CDF, HMRC offers a contract: if a person admits deliberate tax fraud, makes a valid Outline Disclosure and then gives full and accurate disclosure under the COP9 process, HMRC undertakes not to pursue a criminal investigation into the deliberate conduct disclosed. That protection is defined by the offer and has limits.

The CDF is only for deliberate behaviour. Careless errors should not be falsely admitted to obtain perceived protection, and genuinely deliberate conduct should not be hidden inside a denial. The decision must follow a privileged, evidence-led review of what occurred and who was involved.

An Outline Disclosure is concise but substantive. HMRC’s form asks for the nature of the deliberate conduct, how it was carried out, the people or entities involved, the tax loss and supporting context. Omitting a material deliberate issue can leave it outside the undertaking and may undermine credibility.

A denial is also a serious formal position. HMRC may continue the investigation and can consider criminal investigation where it believes deliberate conduct exists. No response does not end the matter. Whichever route is selected, the reasoning and supporting records should be documented before the deadline.

After acceptance, HMRC commonly seeks an opening meeting and a detailed disclosure report. The work may cover connected entities, bank and asset records, tax computations, interest, penalty behaviour and certificates or statements confirming completeness. Scope and document requests should be managed carefully without obstructing the investigation.

Deliberate penalties can be substantial and HMRC may consider publishing details of deliberate defaulters when statutory conditions are met. Cooperation can affect penalty mitigation but does not justify an inaccurate admission. Settlement should be based on verified facts, correctly calculated liabilities and clear understanding of every signed statement.