HMRC Tax Investigations 2026/27 — COP8, COP9 & Compliance Checks

Receiving a letter from HMRC does not by itself mean that fraud is suspected. A compliance check can be a short check of one fact or a detailed review of a tax position, and HMRC will write or phone to explain what it wants to check. The reason and deadline in the letter control the response. Reply accurately, keep copies and consider professional advice where the scope is wide or deliberate behaviour is mentioned. Check your filing position with the Self Assessment Calculator→ and read the HMRC Penalties & Appeals guide before you reply.

The two specialist frameworks covered here are COP8, a civil investigation used for certain fraud and bespoke-avoidance cases where COP9 is not used, and COP9, the Civil Investigation of Fraud procedure with its 60-day Contractual Disclosure Facility. They are not names for every routine compliance check. Read the exact notice before deciding how to respond.

Why HMRC Opens an Investigation

HMRC says a check may be prompted by figures that seem wrong, a claim that appears unusual or a mismatch with information it holds. A nudge letter is generally an informal prompt to review a position; it is not the same as a formal compliance check. It should not be ignored, but receiving one does not automatically mean a formal enquiry will follow. Correct a return only after checking the facts and the applicable rules.

COP8 vs COP9

Under COP9 you may be offered the Contractual Disclosure Facility: within 60 calendar days you decide whether to accept it and make the required outline disclosure. If the contract is accepted, its protection depends on complying with the terms, including a full and truthful disclosure of the deliberate behaviour and relevant irregularities. If you reject or ignore the offer, HMRC may begin a criminal investigation; that outcome is not automatic, but the CDF protection is not available on the same basis.

Penalty Bands for Errors

For standard inaccuracy penalties, the percentage is applied to Potential Lost Revenue — the tax at risk from the inaccuracy. The exact range depends on behaviour, whether the disclosure was prompted and the quality of telling, helping and giving. Offshore matters and other penalty regimes can have different rules. A penalty percentage should not be turned into a fixed “typical” bill without establishing the tax, behaviour and disclosure facts.

Real Example: The Cost of Getting It Wrong

Take a landlord who under-declared £10,000 of rental income over two years and £4,000 of tax may be lost. The eventual liability depends on the facts: reasonable care may mean no inaccuracy penalty, while a prompted careless disclosure falls within the standard 15%–30% range, or £600–£1,200 on £4,000 of Potential Lost Revenue before interest. Deliberate behaviour uses different ranges and may have more serious consequences. This is an illustration of the calculation, not a prediction of HMRC's decision.

How to Respond to an Enquiry

• Read the letter carefully and note the exact deadline — do not assume every information request allows 30 days.
• Gather the documents requested and answer accurately; seek advice if the request is unclear or wider material may be relevant.
• Reply in writing through the channel HMRC names, keeping copies of everything you send.
• Consider professional advice if the sums are significant, the scope is wide, or the letter mentions deliberate behaviour.
• Do not delay — cooperation and disclosure quality can affect penalties, but the letter's legal deadline and the facts of the case remain decisive.

If you disagree with HMRC's conclusion, the decision letter explains the review and appeal options. HMRC normally gives 30 days to appeal a penalty or tax decision, but use the deadline in the notice. Interest normally runs from the original due date on tax that remains due, so settling promptly after agreeing the figures can limit further interest.

Record-Keeping Duties

Good records are your best defence. Self-employed taxpayers must keep records for at least five years after the 31 January submission deadline of the relevant tax year, so an on-time 2026/27 return normally points to 31 January 2033. Other taxpayers have different rules depending on the return and records; keep supporting documents for the period HMRC requires rather than relying on one universal period. Company accounting records generally have their own Companies Act retention rule. If records are missing, provide the best figures and explain the position; separate penalties or estimates can depend on the facts.

Timeline of a Compliance Check

A compliance check does not have one predictable timetable. For a Self Assessment return filed on time, HMRC's statutory enquiry window normally ends 12 months after the date it received the return; late returns use different quarter-date rules. Once a check is open, the letter or information notice sets the response requirements and HMRC may ask follow-up questions, arrange a meeting or issue a closure notice. Review and appeal deadlines come from the decision or penalty notice. Interest normally applies to tax that remains payable from its original due date; the outcome of a review or appeal can change the amount due.

Common Investigation Mistakes

• Ignoring nudge letters — review the facts and act where the law requires, but do not assume a nudge is a formal enquiry.
• Giving an incomplete verbal answer — use the channel HMRC names and keep a record of what you provide.
• Destroying records while an enquiry is open — that is obstruction, not housekeeping.
• Amending the return mid-enquiry without telling HMRC — it looks evasive.
• Panicking into a COP9 disclosure if you only received COP8 — the two procedures are not interchangeable.

Triage the notice before producing records

Create a one-page control sheet with the notice date, tax type, periods, questions, response deadline, named HMRC officer and the records requested. Mark each question as factual, computational or behavioural. A factual question may be answered from a bank statement; a behavioural question about why an entry was made may require the contemporaneous contract, advice and decision record. Do not answer a question you do not understand with a guess. Ask HMRC to clarify the scope while protecting the original deadline, or have an adviser review the wording.

Keep a disclosure log. List each document supplied, the date sent, the covering explanation and any known gap. If a document is missing, say so and explain what alternative evidence exists. Do not create a new document that appears to have existed at the time, and do not hide an unfavourable transaction in a large data dump. Clear indexing helps HMRC test the right facts and helps the taxpayer identify whether the eventual assessment matches the evidence.

Separate the tax calculation from the penalty calculation. First reconcile the income, expense, gain or claim to the return and calculate the tax difference. Then consider behaviour, prompted or unprompted disclosure and the quality of telling, helping and giving. A disagreement about whether an expense is deductible is not automatically evidence of deliberate behaviour. Equally, a taxpayer should not describe an intentional omission as a simple calculation error. The facts and contemporaneous records determine the appropriate response.

If a meeting is proposed, ask for its purpose, attendees and documents required. Keep a written note of what was said and correct any material misunderstanding promptly. A meeting does not replace a written response where the notice asks for documents or explanations. For COP8 and COP9, specialist advice is particularly important because the procedure and consequences are different from an ordinary check.

Action Plan for an Enquiry

Frequently Asked Questions

Prepare your position with the Self Assessment Calculator→, then read the HMRC Penalties & Appeals guide and the Record Keeping Requirements guide to keep every enquiry short.

Official sources

• GOV.UK: Tax compliance checks
• HMRC: Compliance checks — help and support
• HMRC: Specialist investigations for fraud and bespoke avoidance — COP8
• HMRC: Code of Practice 9 — where HMRC suspects fraud
• HMRC: Admitting tax fraud — Contractual Disclosure Facility
• HMRC: Penalties for inaccuracies in returns or documents — CC/FS7a
• GOV.UK: How long to keep self-employed records