Tax & admin · 3 October 2017

HMRC laws criminalise businesses that fail to stop facilitating tax evasion

HMRC
New HMRC laws introduced two criminal offences that could apply to UK corporations

British businesses that fail to prevent workers from breaking the law by facilitating tax evasion risk prosecution under new HMRC laws.

On 30 September, The Criminal Finances Act 2017 introduced two new criminal offences that could apply to UK corporations and partnerships – one applying to tax evasion in the UK and one applying to evading overseas taxes.

It is already a crime in Britain to evade tax, or enable another person to do so, but the new HMRC laws can be viewed as a renewed effort by government to take a firmer stand against corporate fraud, and an attempt to encourage change in corporate culture.

The HMRC laws will criminally charge corporations and partnership businesses that fail to stop employees, agents or other service providers they’re engaged with, from deliberately facilitating tax evasion.

In a statement, financial secretary to the Treasury, Mel Stride, said: “The new offences will ensure that companies doing business in the UK take reasonable steps to prevent their staff from facilitating tax evasion.

“The vast majority of businesses play by the rules but we must ensure that those that don’t are accountable for their actions.”

HMRC will oversee investigations into tax evading offences in cases involving UK tax, whereas the Serious Fraud Office will be responsible for investigating foreign tax-related crimes. The two organisations will continue to work closely together.

In the 2016/17 tax year, HMRC collected £26bn of UK tax that would have otherwise gone unpaid from those not following tax evasion rules, and was successful in 90 per cent of criminal prosecutions it undertook, according to government statistics.

Stride went on to say: “Tax evasion is a crime and takes away from the money we need to fund our vital public services.”

Small businesses urged to prepare for imminent tax evasion legislation

Sign up to our newsletter to get the latest from Business Advice.


 
TAGS:

ABOUT THE EXPERT

Fred Heritage is deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London. He previously worked as a reporter at Global Trade Review magazine.

Q&A

If you’ve found the article above useful, but have a more detailed and bespoke question, then please feel free to submit a query to our expert. We at Business Advice will get in contact with them on your behalf and arrange for a personalised response. These questions and answers will then be collated on the site for any other readers who have similar queries.

Ask a question

On the up