Part Three of The Criminal Finances Act 2017 (CFA 2017) introduces two new corporate criminal offences:
- The failure to prevent facilitation of UK tax evasion offences
- The failure to prevent facilitation of foreign tax evasion offences
Both “failure to prevent” offences can be committed by a body corporate or any partnership (a relevant body) and both enter into force on 30 September 2017.
It is a defence to both offences, however, if a relevant body can prove that it has implemented reasonable prevention procedures. Prevention procedures are procedures designed to prevent any employee (or agent) of, or any other person who acts for (or on behalf of), the relevant body (associated persons) from committing a tax evasion facilitation offence.
CFA 2017 makes it significantly easier to criminally prosecute relevant bodies in circumstances where tax evasion has taken place. The new offences are strict liability offences – that is, the absence of knowledge or intention is no defence. Bodies corporate and all partnerships are strongly advised to act quickly to both:
- Review their existing procedures and identify any risk of exposure under CFA 2017
- Design and implement comprehensive prevention procedures to prevent associated persons, in the UK and around the globe, from facilitating tax evasion