Extensive new enforcement powers have been introduced under the Criminal Finances Act 2017, with the corporate criminal offence of failure to prevent the facilitation of tax evasion coming into force on 30 September 2017.

This landmark legislation will have far-reaching consequences for both companies and partnerships. Organisations can now be held to account for failing to prevent the facilitation of tax evasion in the UK and abroad by an ‘associated person’ unless it can be proved that it had reasonable prevention procedures in place. An associated person includes an employee, agent or other person who performs services for or on the company’s behalf.

In the past, HMRC has encountered difficulties in prosecuting corporates for facilitating tax evasion due to the problem of attributing criminal liability to a company. The new legislation has dispensed with the need to prove that the ‘controlling mind’ of a company (ie, senior management) was aware that tax evasion had been facilitated.

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