FCIM102040 - Where CDF offer is made up to 29 June 2014: pre-authorisation review and action: limited companies

It is not possible to give COP9 to a company. If there are suspected fraudulent transactions or omissions arising in a company, then the investigator needs to determine to whom COP9 should be issued.

Likewise, there will be particular cases where the person able to make a financial settlement may not be the person who committed the fraud. Examples could include board members, new directors or shareholders where it was the previous incumbents who committed the fraud.

The key element for applying COP9 is that there must be someone who can make an admission of deliberate conduct and a disclosure of what they have done. It is not necessary for that person to be personally responsible for the tax consequences of their conduct. We expect a disclosure of irregularities committed through all entities, not only those with which there is a current connection.

Example

You receive reliable information that Purple Ltd, under its former owner and director Violet Pink, was engaged in significant evasion of VAT and PAYE. The information comes from a former senior employee who left the company shortly before Ms Pink sold it to Rose Carmine, who is now the sole director. There is no evidence that the fraud has continued under new management and ownership, and recent VAT and PAYE returns suggest otherwise. You could offer COP9 to Violet Pink. Any admission she made would be third party evidence to establish the liability of Purple Ltd (and might also lead to personal liabilities for her and/or the attribution of company penalties to her personally). It would not be appropriate to issue COP9 to the new director, Ms Carmine. But an investigation would have to be opened into Purple Ltd, under either Code 8 or CC/FS1.

Penalty reduction for Purple Ltd would take account of the co-operation of the new director, but not the former director. Once Ms Pink had secured immunity from criminal investigation by making a valid outline disclosure, it might be difficult to induce her to co-operate further, unless there were personal penalty consequences for her.