Commentary

V5.321 Failure to prevent facilitation of tax evasion

Part V5 Compliance, enforcement and appeals

V5.321 Failure to prevent facilitation of tax evasion

V5.321 Failure to prevent facilitation of tax evasion

Although the pre-existing criminal legislation regarding tax evasion extends to the facilitation of evasion by another person1, this requires the prosecuting authority to demonstrate that, in the case of organisations, the senior members of that organisation (eg the directors of a limited company) were involved in and aware of the evasion. As a result, the provisions described below are intended to, in the words of HMRC, “overcome the difficulties in attributing criminal liability to relevant bodies for the criminal acts of employees, agents or those that provide services for or on their behalf2”.

Offence

Consequently, and with effect from 30 September 2017, a relevant body3 (B) is guilty of an offence if a person commits a “UK tax evasion facilitation offence” when acting in the capacity of a person associated with B4. A similar offence (beyond the scope of this work) arises in the case of the failure to prevent the facilitation of foreign tax evasion5.

A person is “associated with B” if he is (a) an employee of B when acting in that capacity, (b) an agent of B when acting in that capacity, or (c) any other person who performs services for or on behalf of B when acting in that capacity (in the light of all the relevant circumstances6.

A “UK tax evasion facilitation offence” means an offence under UK law consisting of7

  1.  

    (a)     being knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of a tax

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