Go back
Physician, Heal Thyself - Tax Investigation under COP8

Physician, Heal Thyself – Tax Investigation under COP8

Client Background

The managing partner of a chartered accountancy practice approached us with a critical tax issue: he had failed to submit his self-assessment returns for seven consecutive years. As a managing partner, he was concerned about potential serious repercussions, especially considering his status as a “special category person.” His primary fears included investigations under Code of Practice 9 (COP9), the risk of losing his practising certificate upon reporting the matter to his regulatory body, and potential damage to his professional reputation.We immediately thought there might be another approach, using COP8.

The issue for the client

The client’s primary concerns were the potential implications of being investigated under COP9, including the obligation to report the matter to the regulatory body, the risk of losing his practising certificate, and the possibility of HMRC publishing his details, leading to irreversible damage to his professional reputation.

Resolution approach

Upon understanding the client’s situation, we delved into the circumstances that led to the failure to submit tax returns for seven years. A combination of unfortunate life events and episodes of poor mental health emerged as contributing factors. Recognizing the significance of these mitigating factors, we approached HMRC with a voluntary disclosure on behalf of the client.

The outcome of the process

By strategically emphasising the mitigating factors during our submission, we successfully persuaded HMRC to investigate the matter under Code of Practice 8 (COP8) rather than COP9. This strategic decision had several positive outcomes:

  1. No Admission of Deliberate Behavior: The client was not required to admit deliberate behaviour or fraud, preserving his legal standing and mitigating potential criminal implications.
  2. Lower Level of Penalty: Investigating COP8 resulted in a lower level of penalty for the client. This reduction in financial liability was directly attributed to the strong presentation of mitigating factors.
  3. No Disclosure to Regulatory Authority: The client was not obligated to report the matter to his regulatory authority, mitigating the risk of losing his practising certificate and protecting his professional standing.
  4. Non-Publication of Details by HMRC: HMRC did not publish the client’s details, safeguarding his professional reputation and preventing potential terminal damage to his business.

Conclusion

This case illustrates the importance of a strategic and empathetic approach to resolving tax issues, taking into account mitigating factors and leveraging voluntary disclosure to navigate complex regulatory landscapes. By focusing on presenting a compelling narrative and emphasising mitigating circumstances, we successfully steered the investigation away from potentially severe consequences, preserving the client’s professional standing and mitigating financial and reputational risks. Get in touch to find out more about our services.

Web Design SkiptonWeb Developer Skipton

Copyright 2024. All Rights Reserved