(Business News Wales) -- The new corporate criminal offences in the Criminal Finances Act 2017 went live on the 30th September this year. This introduces corporate offences for failing to prevent the facilitation of UK and offshore tax evasion by an associated person.
Associated persons are defined broadly and include employees, agents or other persons performing services for or on behalf of the company or partnership. This means that risks posed by suppliers, contractors and intermediaries must be considered. Importantly an individual does not necessarily need to have a contract with the firm in order to be classified as an associated person. This can represent practical difficulties in identifying who your associated persons are.
Ignorance of the crime on the part of the firm’s management, or a lack of intent is not sufficient to prevent being charged with failure to prevent the facilitation of tax evasion. Firms instead need to demonstrate that they have implemented reasonable controls and preventative procedures against facilitation offences within their organisation in order to defend a potential prosecution.
The first step for firms is to undertake a tax-specific risk assessment, in line with HMRC’s guidance. All UK incorporated firms and all foreign firms with a place of business in the UK will need to undertake such a risk assessment.
Grant Thornton is supporting clients with a multi skilled team of experts, which draws on skills and experience from Financial Crime and Investigations, Business Risk Services, Tax and their wider Forensics practice. Fred Brown, Forensic Director in the Cardiff office said, ‘This multifaceted approach allows us to support clients in undertaking a risk assessment and helping them to adopt appropriate procedures so that they can avail themselves of the statutory defence. HMRC have some very specific requirements as to their expectations and the measurements they apply are based on six key principles. Due diligence, effective training and communications and robust compliance procedures are all necessary to ensure organisations are not just paying lip service and rebadging existing assessments.’