COP9
Code of Practice 9 (COP9) and the Contractual Disclosure Facility
If HMRC has issued you with a Code of Practice 9 letter, you have 60 days to respond and the decision you make in that period will shape everything that follows.
A Code of Practice 9 letter means HMRC suspects that you have committed tax fraud. There is no comfortable way to put that, and being clear about it is more useful than softening it.
Alongside that suspicion, HMRC is offering the Contractual Disclosure Facility, which operates as a contract. If you admit deliberate conduct, disclose it in full, and pay the tax, interest and penalties due, HMRC undertakes not to pursue a criminal investigation into the conduct you have disclosed. It is the only route HMRC offers that removes the prospect of prosecution by agreement.
You have 60 days from the date of the letter to respond. HMRC grants extensions only in exceptional circumstances.
Your three options, and what each one involves
Accept the offer
You sign the acceptance and submit an Outline Disclosure within the 60 days, setting out the deliberate conduct, which taxes and years are affected, and how it came about. A fuller Formal Disclosure and report follow later.
Acceptance brings protection from prosecution, but only in respect of what you actually disclose. An incomplete disclosure is the most serious risk in the whole process, because it can remove the protection you believed you had secured.
Reject the offer
Appropriate where you have not committed fraud.
HMRC will usually investigate in any event, without the civil settlement framework and with the criminal route still available. This can be a sound position, but it needs to be a considered one.
Do nothing
The least advisable course.
A non-response is treated as a denial, so you lose the protection without gaining anything in return.
Why the first 60 days determine the case
Most of the difficulty in a COP9 case is concentrated in that opening window. Within it, you need to establish what happened across potentially twenty years of records, form a view on what HMRC already knows, assess whether the conduct meets the threshold of deliberate behaviour, and produce an Outline Disclosure that is complete enough to protect you without extending beyond what the facts support.
Errors in either direction are costly. Too narrow a disclosure risks the contract; too wide a disclosure volunteers exposure that was never in issue.
How Bracey’s handles a COP9
Immediate triage
We review the letter, confirm the deadline, and give you an initial view on scope within days rather than weeks.
Establishing the facts
A structured reconstruction of the position covering records, bank data, entities and any overseas elements, so that decisions rest on evidence rather than recollection.
The acceptance decision
A clear recommendation on whether to accept or reject, with the reasoning set out so that the decision remains yours.
The Outline Disclosure
Drafted to be complete and accurate within the deadline.
The Formal Disclosure and report
The detailed work, including the disclosure report, computations and certificates.
Negotiation and settlement
Quantifying tax, interest and penalties, arguing the behavioural category where it is arguable, and agreeing terms, including time to pay where the liability cannot be met in one instalment.
Our COP9 experience
We have acted on many COP9 cases involving disclosures of deliberate wrongdoings and defending innocent mistakes.
Penalties under a COP9 settlement
The financial outcome is tax, plus interest, plus a penalty. The penalty is calculated as a percentage of the tax and varies considerably depending on whether the disclosure is prompted or unprompted, how complete it is, and how much practical assistance you give HMRC in quantifying what is owed. Offshore matters attract materially higher maximum penalties than domestic ones.
The practical point is that the penalty range is wide, and where you fall within it is directly influenced by how the disclosure is handled. That is where specialist representation makes a measurable difference.
Frequently asked questions
Does accepting the offer mean admitting fraud?
Yes. The Contractual Disclosure Facility is founded on an admission of deliberate conduct. That is why the decision to accept or reject warrants proper consideration.
Will HMRC publish my name?
HMRC’s list of deliberate defaulters is a real risk in some cases and managing that risk forms part of the strategy from the outset.
I have had the letter for five weeks. Is it too late?
No, although you should contact us today. The remaining time is short but workable, and we have taken on cases at a later stage.
Can I use the Worldwide Disclosure Facility instead?
That is a different facility for a different purpose. The Worldwide Disclosure Facility suits offshore irregularities where fraud is not in issue. If HMRC has already offered Code of Practice 9, that choice has largely been made for you, but we will tell you if the Worldwide Disclosure Facility is the better fit.
What if I want to make a disclosure before HMRC contacts me?
Then your position is considerably stronger. An unprompted disclosure attracts lower penalties, and the Contractual Disclosure Facility can be requested voluntarily. We would encourage you to speak to us sooner rather than later.
Get in touch
Sixty days is a short period. The first consultation is free, confidential and carries no obligation.
Or book a free 30-minute consultation online.