The importance for businesses of avoiding tax fraud

HM Revenue & Customs (HMRC) recently announced that it plans to boost its use of Code of Practice 9 (COP9), a legal mechanism used to handle suspected tax fraud cases.

This move aims to provide a clear procedure for taxpayers who have failed to pay the correct amount of tax due to fraud.

This announcement compounds the importance for businesses to file their tax returns on time and the potentially dire consequences for those that don’t.

As accountants, we understand the importance of accurate and timely tax filing, and the recent updates to the HMRC’s COP9 serve as a powerful reminder of this. COP9 can be used in situations of suspected tax fraud when a criminal investigation has not been initiated.

COP9 allows taxpayers to admit to any tax fraud and pay owed taxes and penalties to avoid any criminal charges under an agreement known as the Contractual Disclosure Facility (CDF).

Under a CDF, an individual or business must agree to disclose in full any irregularities and deliberate fraudulent activity in their tax affairs. In return, HMRC will agree to not undertake criminal proceedings against them.

With the recent updates to COP9, HMRC wants to emphasise the significance of these investigations and underline that taxpayers must understand that the CDF serves as an alternative to a criminal investigation.

As accountants, we view these changes as a crucial reminder to all businesses of the importance of filing accurate tax returns on time. It underscores the serious legal and financial consequences of tax fraud or failure to comply with tax obligations.

With this in mind, here are some upcoming dates for important tax return deadlines:

• 30 June 2023 – Deadline for filing of accounts with Companies House for accounting periods ended 30 September 2022.
• 30 June 2023 – Corporation Tax returns due for accounting periods ended 30 June 2022.
• 5 July 2023 – PAYE Settlement Agreements (PSAs) for 2022/23 must be agreed with HMRC.
• 6 July 2023 – Close companies providing beneficial loans to a director must elect for all loans to be treated as a single loan by this date to calculate benefits in kind.
• 6 July 2023 – Copies of 2022/23 P11d documents should be issued to employees and forms submitted to HMRC.
• 7 July 2023 – VAT returns and payments due for Accounting Quarter period ending 31 May.
• 22 July 2023 – Deadline for electronic remittance of PAYE, NICs and CIS to HMRC, as well as Class 1A NIC owed on expenses or benefits.
• 31 July 2023 – Deadline for filing of accounts with Companies House for accounting periods ended 31 October 2022.
• 31 July 2023 – The second payment on account for the 2022/23 tax year is due.
• 31 July 2023 – Corporation Tax returns due for accounting periods ended 31 July 2022.

For businesses, accurate and timely tax filing isn’t just good practice, it is essential to avoid the risk of severe penalties, including substantial fines and even potential criminal charges.

If you’d like expert advice on submitting taxes on time or if you need help with any penalties you may be facing, please contact us today.