Associated person—tax evasion facilitation prevention—law firms
Associated person—tax evasion facilitation prevention—law firms

The following Practice Compliance practice note provides comprehensive and up to date legal information covering:

  • Associated person—tax evasion facilitation prevention—law firms
  • Guidance
  • Risk presented by associated persons
  • Definition of associated person
  • Partners, employees and consultants
  • Agents, contractors and other third parties
  • Referrals and introducers

Associated person—tax evasion facilitation prevention—law firms

The Criminal Finances Act 2017 (CFA 2017) introduced a corporate offence of failure to prevent facilitation of tax evasion, from 30 September 2017.

There are two potential offences, depending on whether the tax evaded is owed in the UK or in a foreign country. Each offence has three core stages, all of which must exist for criminal liability to arise:

There is only one defence, ie when the tax evasion facilitation offence was committed:

  1. your firm had in place such prevention procedures as was reasonable in all the circumstances to expect, or

  2. it was not reasonable in all the circumstances for you to have any prevention procedures in place

For more guidance on the offence and defence, see Practice Note: Failure to prevent facilitation of tax evasion—compliance issues.

There are additional requirements for the foreign offence, including a ‘dual criminality’ requirement. See Practice Note: Failure to prevent facilitation of tax evasion—compliance issues—jurisdictional issues.

Guidance

The government has issued Government guidance for the corporate offences of failure to prevent the criminal facilitation of tax evasion which sets out its expectations on compliance systems.

The Law Society has also published Criminal Finances Act 2017 guidance for law firms, which was approved by the chancellor on 21 November 2018. According to the Law Society, the chancellor considers that its guidance is consistent with the Government guidance for the

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