11 10 2017

UK Introduces Criminal Offense For Facilitating Tax Evasion

Corporations could be prosecuted if they fail to prevent staff from criminally facilitating tax evasion, under a new HM Revenue and Customs (HMRC) law.

It is already a crime to evade tax, or deliberately help another person to do so. Under the Criminal Finances Act 2017 introduced on September 30, two new criminal offenses were created: one applying to the evasion of UK taxes and one applying to the evasion of foreign taxes.

The offences hold corporations and partnerships criminally liable when they fail to prevent their employees, agents, or others who provide services on their behalf from criminally facilitating tax evasion. This is a significant change from existing law under which they can only be found liable for criminally facilitating tax evasion if the most senior members of the organisation – typically the board of directors – are aware of the facilitation, HMRC said.

"The vast majority of businesses play by the rules but we must ensure that those that don't are accountable for their actions," said the Financial Secretary to the Treasury, Mel Stride. "The new offences will ensure that companies doing business in the UK take reasonable steps to prevent their staff from facilitating tax evasion."

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