Corporate Criminal Offence: Is my business at risk?

The introduction of the Corporate Criminal Offence Act on 30 September 2017 signified an intent to try and prevent the criminal facilitation of tax evasion.

What is a Corporate Criminal Offence?

Although the rules have been in place for some time, in our experience they are not commonly understood, but failure to adhere can lead to significant penalties, so business owners should take note.

The rules apply to all companies and partnerships, regardless of their size or sector, and allow for an unlimited penalty to be charged to a business that fails to prevent tax evasion, either in the UK or overseas.

Although the penalties can be unlimited, there is a defence against penalties where the business has reasonable procedures in place to prevent tax evasion.

Fortunately, the rules do not apply to crimes committed by customers.

A business is guilty of the offences if they fail to prevent the criminal facilitation of tax evasion.

How Shorts can help

There is a defence against these offences if the business has measures in place to prevent the tax evasion from occurring.

The measures need to be proportionate to the businesses risk of exposure to evasion, and therefore businesses of different sizes will need different levels of measures. Below is a list of some of the measures that could be implemented, which could be used to provide the business with a defence if an offence was committed.

• Risk assessment – need to consider risks and exposure, and review on a regular basis to ensure that any changes in client circumstances are kept updated
• Top level commitment – needs to be fully implemented by top level management, senior management should endorse and be involved in decision making, depending on the size of the company.
• Communication (including training) – to ensure that prevention measures are adopted and clearly communicated, and individuals are trained. Whistleblowing procedure if necessary to ensure that any offences can be reported
• Monitoring & Review – measures need to be constantly reviewed and updated relating to any new risks posed over a period of time and improve all measures

These procedures need to be constantly reviewed and monitored, and firms need to show a zero-tolerance policy towards tax evasion, right throughout the firm, from senior management to trainees.

Shorts can help ensure that your policies are robust and advise on how to comply fully with the act. Get in touch with our dedicated team today if you need advice.