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Is an introducer an associated person for the purpose of tax evasion facilitation prevention—law firms?
Published on: 09 October 2017
What is the issue?
The Criminal Finances Act 2017 (CFA 2017) created a new corporate offences of failure-to-prevent facilitation of tax evasion.
Your firm can be held liable for this corporate offence if a person acting in the capacity of an associated person criminally facilitates a tax evasion offence.
The definition of associated person is broad and can embrace a wide range of business relationships:
- •
an employee who is acting in the capacity of employee
- •
an agent (other than an employee) who is acting in the capacity of an agent, and
- •
any other person who performs services for or on behalf of the firm who is acting in the capacity of a person performing such services—questions as to whether a person is performing services for or on behalf of a firm will be determined by reference to all relevant circumstances, not merely the nature of the relationship, contractual status or label applied to that person
An associated person can be an individual
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Associated person definition
What does Associated person mean?
The definition of associated person is broad and can embrace a wide range of business relationships: • an employee who is acting in the capacity of employee • an agent (other than an employee) who is acting in the capacity of an agent, and • any other person who performs services for or on behalf of the firm who is acting in the capacity of a person performing such services—questions as to whether a person is performing services for or on behalf of a firm will be determined by reference to all relevant circumstances, not merely the nature of the relationship, contractual status or label applied to that person An associated person can be an individual or an incorporated body. The question as to whether a person is performing services for or on behalf of an organisation will be determined by reference to all relevant circumstances, not merely the nature of the relationship, contractual status or label applied to that person. For criminal facilitation to occur, the associated person must: • deliberately and dishonestly take action to facilitate the taxpayer-level evasion—if they accidentally, ignorantly or even negligently facilitate the tax evasion, the failure-to-prevent offences cannot apply, and • do so in their capacity as an associated person of the organisation—the offences will not apply if the associated person is on a frolic of their own or acting in a personal capacity A person can be ‘associated’ and ‘not associated’ at different moments in time depending on the capacity in which they are acting at that moment. The criminal act of facilitation can only be committed when that person is acting in a capacity of an ‘associated’ person.
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