Corporate criminal offences

Produced by Tolley
Corporate criminal offences

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Corporate criminal offences
  • Background to the corporate criminal offences
  • Overview of the corporate criminal offences
  • Taxes covered by the corporate offence
  • Stage 1 ― criminal evasion of tax by a taxpayer under existing law (taxpayer level offence)
  • Stage 2 ― criminal facilitation of the tax evasion by an associated person of the relevant body
  • Stage 3 ― the relevant body failed to prevent the associated person from committing the criminal facilitation act
  • Implementing measures and procedures to prevent the facilitation of tax evasion by an associated person
  • Risk assessment
  • Proportionality of risk-based prevention procedures
  • More...

This guidance note provides an overview of the guidance published by HMRC on the corporate offences of failure to prevent the criminal facilitation of tax evasion (often referred to as the corporate criminal offences legislation) that was introduced with effect from 30 September 2017.

Please use the following link to obtain a copy of the guidance: Failing to prevent criminal facilitation of tax evasion ― Government guidance on the criminal offences.

It should be noted that the legislation applies to all companies and partnerships, regardless of their size or sector. Broadly, two corporate offences were introduced for, one relating to the evasion of UK tax and one relating to the evasion of foreign tax. The legislation is very widely drawn and can apply to the evasion of any tax, including indirect and employment taxes, anywhere in the world. The business can potentially face unlimited financial penalties, though a defence exists where the business has reasonable prevention procedures in place.

Background to the corporate criminal offences

Historically, it has been necessary for the authorities to have evidence that the senior members of a relevant body were involved in, or were aware of, the illegal activity before they can be successfully prosecuted. As a result, it has been difficult to hold large multinational corporations accountable for actions taken by associated persons that result in tax evasion. The common law method of criminal attribution may also have acted as an incentive for more senior members within an organisation to ignore criminal acts undertaken by associated persons or for senior members making a decision not to report any illegal tax activities undertaken. As a result, many large organisations did not implement good corporate governance and reporting procedures.

The corporate offences of failure to prevent the criminal facilitation of tax evasion (often referred to as the corporate criminal offences legislation) are intended to overcome the difficulties encountered in attributing criminal liability to a relevant body for criminal activities undertaken by an employee or

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