TTOG3470 - Code of Practice 8: particular types of Code of Practice 8 cases: cases generated from projects

The Code 8 Investigator will often consider a perceived industry-wide problem through the medium of a project. No specific taxpayer may be identified but a body of employees may be benefiting to the detriment of HMRC from an arrangement entered into with their employer.

The Investigator will research the position reviewing contracts and related documents and discussing the arrangements with the employer. Depending on the facts of the case, the employer itself or the individual employees may be registered for Investigation under Code 8.

In some cases the Investigator may identify a marketed scheme that has not been notified under the Disclosure of Tax Avoidance Schemes (DOTAS) legislation. It will be necessary to liaise with the Counter Avoidance directorate (CAD) to determine who should work the case.

In project work it may often be necessary to undertake third party research with an individual or a company which may in due course become a first party.

SI policy generally is not to make first party contact unless the case is actually registered for investigation. However in project cases it can be appropriate to approach someone who may be a first party whilst the case is still part of the project. If it becomes apparent from the taxpayer’s responses to our enquiries that he/she is a first party rather than a third party, then the taxpayer should be told that the UK tax consequences of their role will have to be considered.

Projects must not be abused to enable Investigators to make first party contact when they would otherwise be debarred from such an approach if the case was being worked under a Review and it is important that Team Leaders exercise due control.