Independent analysis in
HMRC fraud investigations.
Key Ledgers provides forensic accounting analysis in HMRC Code of Practice 8 and Code of Practice 9 investigations, reconstructing financial and tax positions from underlying records.
HMRC COP9 Investigation
Instructed to reconstruct the financial and tax position of a taxpayer under COP9 investigation. The existing accounting records were incomplete and HMRC's own calculations contained assumptions that could not be supported by the underlying evidence. The forensic reconstruction identified material discrepancies in HMRC's figures and formed the basis of the disclosure report submitted under the Contractual Disclosure Facility.
"The difference between HMRC's estimate and the true position was significant. The forensic reconstruction changed the outcome."
How does forensic accounting support an HMRC investigation?
We gather and review all available financial and accounting records, identifying what HMRC has relied upon and where their assumptions cannot be supported by the underlying evidence. We examine every figure in HMRC's calculations against the primary source material.
Where records are incomplete or HMRC's figures are based on estimation, we reconstruct the true financial and tax position from primary sources: bank statements, invoices, payroll records and third-party data. We document the reconstruction fully so that every figure is verifiable.
We prepare forensic-backed schedules for use in the Contractual Disclosure Facility or as the basis of representations to HMRC. Our analysis is structured to identify and document material discrepancies between HMRC's position and what the evidence actually shows.
What makes the
critical difference.
HMRC investigations require a forensic accountant who can reconstruct the true financial position from primary records and produce analysis that genuinely challenges HMRC's own figures.
We are instructed by the taxpayer's solicitor and work independently of HMRC. Our analysis is formed on the underlying evidence, not on what HMRC claims it shows.
Where HMRC matters proceed to the Tribunal, we produce expert reports compliant with CPR Part 35 and can give oral evidence on the forensic accounting issues.
Bharat Varsani FCCA is a Fellow of ACCA and a registered auditor. HMRC knows the professional weight of an FCCA-backed forensic reconstruction.
Instructed in both COP8 and COP9 investigations, including CDF disclosures. We understand the process, the timescales and what HMRC is looking for.
We rebuild the true financial position from primary sources where records are incomplete or HMRC has used estimation. Every figure is verifiable and documented.
We respond to all enquiries the same working day. HMRC investigations often have tight timetables and we work to meet them.
Instructed by tax solicitors, criminal defence firms and tax barristers.
Solicitors advising taxpayers under COP8 or COP9 investigation and requiring forensic accounting analysis to support their response to HMRC.
Defence solicitors in cases where HMRC has opened a criminal investigation or referred a matter to the Crown Prosecution Service.
Counsel in Tax Tribunal proceedings and HMRC enquiries requiring independent forensic accounting evidence on disputed tax positions.
Individuals facing COP9 investigation seeking an independent forensic reconstruction of their true tax position for CDF disclosure purposes.
Forensic-backed analysis that challenges HMRC's own figures.
Our HMRC investigation work product provides the forensic foundation for representations, CDF disclosures and Tribunal proceedings.
- HMRC figures review
A line-by-line review of HMRC's calculations identifying assumptions, unsupported figures and areas where the methodology cannot be sustained by the evidence.
- Forensic tax reconstruction
A rebuilt financial and tax position from primary sources — bank statements, invoices and payroll records — where records are incomplete or disputed.
- CDF disclosure schedules
Forensic-backed schedules for use in the Outline and full CDF disclosure, with figures verifiable against the underlying evidence.
- HMRC representations support
Written analysis and technical support for formal representations to HMRC, setting out the basis for the alternative forensic figures.
- Expert evidence for Tribunal
Where matters proceed to Tax Tribunal, we produce CPR Part 35 compliant expert reports and attend to give oral evidence on the forensic accounting issues.
Frequently asked questions about HMRC COP8 and COP9 investigations.
- Code of Practice 8 (COP8) is used by HMRC where it suspects a significant tax loss but does not have evidence of fraud. Code of Practice 9 (COP9) is used where HMRC suspects deliberate tax fraud. COP9 triggers the Contractual Disclosure Facility, under which the taxpayer must make a complete and accurate disclosure of all tax irregularities in exchange for immunity from criminal prosecution.
- The Contractual Disclosure Facility is the mechanism through which a taxpayer under COP9 investigation can admit deliberate tax fraud in exchange for HMRC not pursuing a criminal prosecution. The taxpayer must submit an Outline Disclosure and, subsequently, a full disclosure report. Both documents require forensic accounting analysis to ensure the figures are accurate and supported by the underlying evidence.
- HMRC's calculations frequently contain assumptions that cannot be supported by the underlying evidence and amounts that are overstated or duplicated. An independent forensic reconstruction of the true tax position often reveals material differences from HMRC's figures. In most cases the difference between the two positions is significant enough to justify the cost of the instruction.
- Yes. HMRC's calculations are frequently based on assumptions about income, turnover or expenses that can be disproved by a proper examination of the underlying records. We review HMRC's methodology, identify each assumption and, where the evidence supports a different figure, document the basis for the alternative calculation. The resulting analysis is used in representations to HMRC or as the basis of an appeal.
- We work directly with the instructing solicitor and their client, providing forensic accounting analysis that informs the legal strategy. Our work is subject to legal professional privilege in most circumstances. We can attend meetings with HMRC where the solicitor considers it appropriate and provide written analysis for use in correspondence and formal submissions.
Related insights.
A practical guide to the COP9 process, the Contractual Disclosure Facility and the role of a forensic accountant in responding to HMRC.
Read articleForensic accounting in criminal financial investigations — related methodology to HMRC criminal referrals and confiscation proceedings.
Read articleForensic reconstruction methodology applied to insolvency — the same rigorous approach used to challenge HMRC's estimated tax figures.
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Independent financial analysis in civil and criminal disputes. Fund tracing and loss quantification.
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Forensic accounting analysis in confiscation proceedings under the Proceeds of Crime Act 2002.
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Tracing assets and funds through complex structures in civil and criminal proceedings.
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We respond to all enquiries the same working day. Instruction details are treated as confidential from the first contact.
"We respond to all enquiries the same working day."