HMRC recently announced that nine businesses are under criminal investigation for failing to prevent the facilitation of tax evasion

By Nicola O'Connor


The press release also disclosed that a further 21 businesses across 10 different sectors have cases under review by HMRC.  We are told that the investigations relate to businesses of all sizes some of whom are amongst the largest organisations. This is the first time we have been told of the number of businesses actively under investigation.  

The corporate criminal offences of failing to prevent the facilitation of tax evasion relating to UK tax and non-UK tax, contrary to Criminal Finances Act came into force on 30th September 2017. The offences are strict liability which means that the prosecution do not have to prove that the companies board or senior management were aware of the facilitation of tax evasion.

Will this apply to you?

HMRC research shows that many businesses have still to act some 3 years following the introduction of the law.  We know from experience that many businesses do not believe that the Act applies to them but there will be few in retail and consumer facing businesses to whom the Act does not apply.   

Any businesses that rely upon supply chains and sub-contractor networks will be particularly vulnerable to investigations under these rules. The law has extra territorial effect so non-UK businesses are also caught within the remit of the offences. So far there have been no prosecutions but clearly this may be about to change.

HMRC will be scrutinising what active steps have been taken to prevent the facilitation of tax evasion. Only those businesses that can show that they have 'reasonable preventative procedures' in place have a defence in law.

Our Tax Disputes and Investigations Team launch the CFA Toolkit

With this in mind we have designed a toolkit that clients can use interactively with us in order to get themselves up to speed quickly. The CFA toolkit is hosted online and provides a cost effective step by step solution for those businesses who currently have no or limited measures in place. Without diverting resources you will be able to access all of the information you need to manage the process yourselves with some help from our team.

Our toolkit can help businesses around the globe deal with the required compliance around the Criminal Finances Act 2017. For more information please click here to see a brief summary and video which show an over view of the Toolkit and the legislation.

The toolkit has been designed by our team who have a rare insight amongst accounting and law firms as they are used to advising and defending businesses facing tax related investigations and prosecutions by HMRC. If you would like to know more please do not hesitate to contact us.