Beyond the balance sheet - Tax evasion

Tax evasion

September 2017 saw the introduction of the criminal finances act 2017 that requires incorporated bodies and partnerships must act to prevent potential criminal facilitation of tax evasion by persons associated with them.

Criminal finances act

The offence of ‘failing to prevent’ attracts strict liability, so the corporate does not itself need to have been guilty of deliberate dishonesty, but only to have been ‘asleep at the wheel’ while someone associated with it knowingly helped another company or individual commit tax evasion. The offence carries an unlimited fine, but the reputational damage associated with a conviction is likely to be of greater concern.

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Withholding tax compliance
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Are you failing to prevent tax evasion? Get ready for going digital

The criminal finances act 2017 came into being on the 30th September 2017 and made the NHS, corporate bodies and partnerships criminally liable if they fail to prevent tax evasion by a member of their staff or via any associated person.

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HMRC contacts businesses regarding new corporate criminal offence

Legislation introduced in the criminal finances act 2017 makes it a criminal offence for incorporated bodies and partnerships (relevant bodies) to fail to prevent the criminal facilitation of tax evasion.

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Employers
Private individuals

Companies must prevent criminal facilitation of tax evasion

The criminal finances act 2017 includes measures that mean incorporated bodies and partnerships must have procedures in place to prevent criminal facilitation of tax evasion by persons ‘associated with’ them. Failure to prevent such facilitation activity is a criminal offence under these rules, unless it can be demonstrated that ‘reasonable prevention procedures’ are in place.

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Beyond the balance sheet

Over the past decade, there’s been a major shift in our understanding of what it means to be a well-run organisation. Financial metrics are no longer the only yardsticks of success. Read more about how good governance should be top of mind and explore best practice tips.

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Beyond the balance sheet