New Corporate Criminal Offence: ‘failure to prevent the criminal facilitation of tax evasion’

Of relevance to: All incorporated bodies (typically companies) and partnerships
Key date: Applicable from 30 September 2017

Companies that aid tax evasion (not to be confused with tax avoidance) will face penalties, including unlimited fines.

A new criminal offence for firms that aid economic crime should stop any organisation being able to get away with facilitating or abetting others to evade tax, an act likely to be related to money laundering.

Back in March 2015, the then Chief Secretary to the Treasury, Danny Alexander, told the BBC “If you help someone evade £1m of tax, you risk a penalty of £1m or even more yourself”.

Now The Criminal Finances Act 2017 has brought into effect two new corporate criminal offences for ALL corporations who fail to prevent their staff from criminally facilitating tax evasion, whether the tax evaded is owed in the UK or elsewhere.

Only incorporated bodies (typically companies) and partnerships can commit these two new offences; they cannot be committed by natural (as opposed to legal) persons.

Corporations can only commit the new offences if an associated person (an individual or an incorporated body) criminally facilitates a tax evasion offence through deliberate and dishonest action. Employees, agents and sub-contractors can be associated persons.

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