According to its 2018-19 accounts, HM Revenue & Custom (HMRC) generated £34.1 billion in additional tax through efforts to tackle avoidance, evasion and non-compliance. The 2018-19 figures showed a significant increase on the amount collected in 2017-18 of £30.3 billion.
Please find below a table summarising the Code of Practice 8 and Code of Practice 9 statistics released by HMRC.
| CoP8 | 2016/17 | 2017/18 | 2018/19 |
| Cases opened | 297 | 369 | 258 |
| Cases closed | 218 | 249 | 380 |
| Yield recorded | £70,063,729 | £73,691,338 | £118,473,279 |
| CoP9 | 2016/17 | 2017/18 | 2018/19 |
| Cases opened | 549 | 486 | 438 |
| Cases closed | 340 | 375 | 512 |
| Yield recorded | £161,101,906 | £91,132,829 | £95,829,887 |
COP9 (Code of Practice 9) cases are investigations launched in situations where HMRC suspects serious fraud has taken place. COP8 cases are civil investigations launched when HMRC believe there has been the avoidance of tax or where an individual has used a scheme to avoid or reduce tax liabilities and where HMRC believes the conduct of the individual(s) is not fraudulent.
Interestingly, the number of COP9 cases opened has fallen consistently year on year since 2016/17 to only 438 new cases being opened in 2018/19.
The amount generated by COP9 cases is also decreasing. In 2016/17, the 340 cases closed generated £161,101,906 (averaging £473,829). However, in 2018/19 512 cases closed generated £95,829,887 (averaging £187,167).
The COP8 statistics show that a significant amount more was collected in 2018/19 than in earlier years as a result of the increased number of cases closed in the year (380 closed cases).
HMRC’s ability to investigate and prosecute taxpayers has been strengthened as the volume of data it receives on individuals has increased. HMRC are benefitting from increasing information sharing, including access to information on offshore taxpayers’ accounts provided under the Common Reporting Standard, which came into force from September 2018, providing them with valuable insight into the movement of cash and assets offshore.
The number of prosecutions also increased significantly over the last five years. In 2019, HMRC’s fraud investigations have led to 648 individuals being successfully convicted for their part in tax crimes. This figure is likely to increase further as new data sources filter through and there continues to be pressure on the Government to narrow the tax gap.
While there is little doubt that recent years have seen HMRC take an increasingly hard line on suspected avoidance, with many high-profile and high value cases of tax avoidance making headline news, cases of “carelessness” or “failure to take reasonable care” by taxpayers remains the largest single cause of the tax gap and will continue to be a focus for HMRC.
It is vital that taxpayers who believe they have not been compliant take swift action to correct their tax affairs in order to avoid a lengthy and intrusive investigation or in the most serious cases a criminal prosecution. Similarly, if taxpayers receive enquiries into their tax affairs that they consider are incorrect, it is important that advice is sought to close any such enquiry and protect the taxpayer from a potentially unnecessary investigation.