Chester 01244 405555

Grosvenor Court
Foregate Street Chester
Cheshire CH1 1HG
DX: 19990 Chester

Shrewsbury 01743 443 043

Lakeside House
Oxon Business Park
Shrewsbury SY3 5HJ
DX: 148563 Shrewsbury 14

Manchester 0844 800 8346

Pall Mall Court
61-67 King Street
Manchester M2 4PD

Send us a message
  • This field is for validation purposes and should be left unchanged.
Our Offices

Criminal Finance Act 2017 – Failing to prevent tax evasion

8th September, 2017

The Criminal Finance Act 2017 is due to come into force at the end of September. The Act provides that companies and partnerships will be criminally liable if they fail to prevent tax evasion by an employee or external agent.

The regulations cover taxes in the UK and overseas. To be liable there must have been:

  1. Criminal tax evasion by a taxpayer (individual or a firm);
  2. Criminal facilitation of the offence by a representative of the organisation;
  3. The organisation failed to prevent its representative from committing the criminal act (facilitation).

If prosecuted the organisation could be subject to conviction and unlimited penalties.

There is a defence available; it must be shown that the organisation had implemented reasonable prevention procedures or, in the circumstances, it would have been unreasonable and/or unrealistic to expect the organisation to have those procedures in place.

Government guidance recommends the following for applying reasonable procedures:

  1. Carry out a risk assessment of your products, services, client data and internal systems which could be used to facilitate tax evasion.
  2. Have written policies and procedures and allocate resources that are proportionate to your risk profile which will be revealed by the risk assessment referred to above.
  3. Management should communicate that activity intended to facilitate tax evasion is not acceptable.
  4. Use a risk based approach to check the procedures of anybody who performs services on behalf of the organisation. Appropriate due diligence should be carried out.
  5. All staff should be trained on understanding how offences are committed, consequences of non-compliance and how to respond to risks. They should be able to identify red flags.
  6. Prevention procedures should be monitored and reviewed regularly to ensure it remains up-to-date, appropriate and improvements are made where necessary.

If you need assistance with the above, and understanding your responsibilities, please contact our Professional Practices Department.

Paul Bennett

Partner in Professional Practices and Employment Law
Email: [email protected]
Tel: 01743 453685

You might also be interested in...

Tesco equal pay case highlights “abuse of female workforce”

8th February, 2018

Helen Watson, Head of Employment Law at Aaron & Partners LLP warns that the latest gender pay gap story to hit the headlines could be just the tip of the iceberg Supermarket chain Tesco hit the headlines for all the wrong reasons this week after it was reported that more than 1,000 of its female staff have sought... Read More »

Will You or Won’t You?

5th February, 2018

According to a recent YouGov survey, it is estimated that more than half of all UK adults have not yet made a Will. Planning for what happens when you die might seem like an uncomfortable conversation, but the reality is that if you make a Will, it does not mean you will die tomorrow. At Aaron and Partners,... Read More »

Solicitor Ordered to Pay £54,000 in Costs on Appeal from Fine of £2,000

19th January, 2018

Professional misconduct was recently at issue in the case of Donna Eloise Cannon v Solicitors Regulation Authority Case No: 11547-2016 Ms Cannon was ordered to pay the Solicitors Regulation Authority’s (“SRA”) costs of £54,000 when she decided to appeal a decision to impose a Rebuke, fine of £2,000 and costs of £1,350. Ms Cannon, who was at the... Read More »

Contact Us