HMRC has published guidance on the new corporate criminal offence of failing to prevent the facilitation of tax evasion and the final version has now been published and given statutory effect.
The Government believes that relevant bodies should be criminally liable where they fail to prevent those who act for, or on their behalf from criminally facilitating tax evasion. The new offences will be committed where a relevant body fails to prevent an associated person criminally facilitating the evasion of a tax, and this will be the case whether the tax evaded is owed in the UK or in a foreign country.
The new guidance explains the policy behind the new offences and is intended to help relevant bodies understand the types of processes and procedures that can be put in place to prevent associated persons from criminally facilitating tax evasion. It will inform the conduct of a risk assessment and the creation of procedures proportionate to that risk.
The guidance is designed to be of general application and is formulated around the following six guiding principles:
- Risk assessment
- Proportionality of risk-based prevention procedures
- Top level commitment
- Due diligence
- Communication (including training)
- Monitoring and review
The guidance aims to:
- Provide guidance to relevant bodies on how they might conduct an assessment of the risk of their representatives criminally facilitating tax evasion
- Help relevant bodies adopt a more effective, risk-based and outcomes-focused approach to mitigating the risk of associated persons criminally facilitating tax evasion
- Assist consideration of whether the reasonable procedures defense is available
- Enhance the understanding of Government expectations and help relevant bodies to assess the adequacy of their existing systems and controls, and remedy deficiencies
- Assist trade bodies in the formulation of more detailed sector-specific procedures.
