New figures show that HMRC is taking a tough line on businesses for failing to prevent the facilitation of tax evasion.
To recap, the Criminal Finances Act 2017 introduced a new set of corporate criminal offences under which businesses can be held criminally liable for failing to prevent their employees, agents and other associated persons from facilitating tax evasion. The offences cover both UK tax evasion and foreign tax evasion.
Where such a person commits an offence, there is strict criminal liability for the business. The only defence is if the business can prove it had reasonable prevention procedures in place. If found guilty, the punishment is a potentially unlimited fine.
HMRC has revealed that it currently has 30 potential cases ongoing under these new offences. These cover a wide range of sectors, including financial services, oils, construction, labour provision and software development. Both small and large businesses are under investigation.
This news shows that HMRC is taking the new corporate criminal offence very seriously. They state explicitly that they want to change "industry practice and attitudes towards risk, encouraging organisations to do more to prevent tax crime happening in the first place". It highlights the need for all businesses to ensure first of all that they have "reasonable prevention procedures" in place; and even if they do, to ensure that those procedures are properly reviewed and maintained.
With potentially unlimited fines for organisations found guilty of the offences, organisations must take their responsibilities seriously and put in place reasonable procedures to stop the facilitation of tax evasion.