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Corporate criminal offences

All companies may be subject to prosecution and unlimited fines if they cannot prevent the facilitation of tax evasion under the Criminal Finances Act 2017. Companies must put  “reasonable prevention procedures” in place to stop someone acting on behalf of the business from facilitating tax evasion either in the UK or abroad. This is the only statutory defence available.  

Companies must risk assess their associated persons ie those who perform services on its behalf – employees, agents, contractors, subcontractors, distributors, suppliers, related party entities and other business partners – and ensure that it has proportionate, risk-based prevention procedures and responses in place.

We support our clients across a range of sectors to ensure good tax governance. We will undertake a detailed risk assessment of your associated persons, identify key risk areas and review existing policies, procedures and the implementation of new controls.  

HMRC expects evidence of top-level commitment, adequate due diligence, the monitoring and review of the risks, as well as effective communication and training. Our internal audit and COO training help companies maintain a proportionate and robust compliance process to support the statutory defence.

HMRC is currently investigating over 30 Corporate Criminal Offence cases covering entities of all sizes, from small to some of the largest in the UK, and covering ten different business sectors, including software development, commodities, construction and financial services.

Large companies that fall within the Senior Accounting Officers (SAO) regime must take extra care when providing SAO certification to HMRC that tax governance and procedures are maintained to manage the risk of facilitating tax evasion. We can advise you on this as part of our comprehensive SAO and COO advisory service.