Code of Practice 8 is a leaflet issued by HMRC (usually by HMRC Fraud Investigation Service (FIS) in cases where they suspect that the individual has instigated tax planning that they do not believe works or where they have reason to suspect that all taxes have not been paid.
Where HMRC issue Code of Practice 8 or Requirement to Correct it should always be noted that HMRC do not, at the time of issue, suspect that a person has deliberately taken illegal steps to reduce their tax bill (ie tax fraud or tax evasion).
It would appear that HMRC are now targeting people with offshore interests using Code of Practice 8.
This is a change in approach as for the last few years Code of Practice 8 (COP 8) has generally be used to target marketed tax planning such as:
Due to the challenge to all of these tax planning arrangements, including retrospective legislation to claw back funds HMRC believe are due, along with legislation introducing heavy penalties on accountants who provide tax planning that is legislated against the use of COP 8 has declined as the amount of “unauthorised” tax planning has reduced.
Read more about Code of Practice 8 (COP8).
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