Tax evasion facilitation risk management guide
Tax evasion facilitation risk management guide

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

  • Tax evasion facilitation risk management guide
  • Why you need to manage this risk
  • Top five priorities
  • 1. Risk assessment
  • Risk assessment—mini action list
  • 2. Top-level commitment
  • Top-level commitment—mini action list
  • 3. Due diligence
  • Due diligence—mini action list
  • 4. Communication and training
  • More...

Why you need to manage this risk

The Criminal Finances Act 2017 (CFA 2017) received royal assent on 27 April 2017. It includes new corporate offences of failure to prevent facilitation of tax evasion, in force from 30 September 2017.

There’s only one defence—when the tax evasion facilitation offence was committed:

  1. your organisation 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

If you’re well acquainted with the failure to prevent offence in the Bribery Act 2010, you’ll be on familiar ground.

You need to make sure that, from 30 September 2017, your organisation has prevention procedures in place covering your employees, agents and intermediaries, unless you’ve conducted a risk assessment and concluded prevention procedures aren’t required—a brave step at this early stage.

HMRC has published guidance on the corporate offences, which sets out six principles that should inform your prevention procedures (more echoes of the Bribery Act regime):

  1. risk assessment

  2. proportionality of risk-based prevention procedures

  3. top-level commitment

  4. due diligence

  5. communication, including training

  6. monitoring and review

Why should you care? If the ‘maintaining a good reputation’ carrot doesn’t work for your organisation the ‘unlimited fines’ stick should do the trick.

Top five priorities

The table below identifies five key priorities for tax evasion facilitation risk management and gives

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