New corporate offences: how can you protect yourself?

The Criminal Finances Act 2017 introduces new corporate criminal offences of failing to prevent the facilitation of UK and foreign tax evasion. All taxes are within scope. All partnerships and corporates (“relevant bodies”) whether or not UK incorporated are also potentially within scope, for example if the relevant body carries on business in the UK. The new offences came into effect on 30 September 2017.

There is a (sole) statutory defence where at the time of the offence the relevant body had “reasonable procedures in place to prevent the facilitation of tax evasion”, or it was unreasonable to expect the relevant body to have any prevention procedures in place. What constitutes “reasonable procedures” is informed by six guiding principles, including risk assessment, top level commitment, due diligence, communication, monitoring and review.

The new offences are a reaction to the government’s frustration at the difficulty in attributing criminal liability to relevant bodies where tax evasion is facilitated by employees or other associates. Potential fines are unlimited and conviction may prevent organisations being eligible for public contracts as well as lead to wider reputational damage.

For further information please contact Sian Skerratt-Williams or your usual contact at Norton Rose Fulbright.