Click on a tax haven to learn more about their risks
The recent huge leak of financial documents revealing how the ultra-rich are secretly investing large amounts of cash in tax havens is the biggest such leak since the Panama Papers last year.
Here is what we know so far:
- The leak of documents mainly exposes one leading financial law firm based in Bermuda.
- The 13.4 million documents shed light on how the super-rich and powerful of the world hide their wealth to avoid paying tax.
- In the US, Wilbur Ross, commerce secretary in Donald Trump’s administration, has business links with Russian allies of President Vladimir Putin who are under US sanctions.
Today, Section 11 of the Criminal Finances Act 2017 comes into force. It amends the Proceeds of Crime Act (POCA) and affects the regulated sector. The new data sharing regime enables regulated persons to request and share information with their regulated peers, free in most respects from contravening data protection regulations. Any disclosure “made in good faith” that does not breach any duties of confidence or “any other restriction on the disclosure of information.”
The purpose is to encourage the sharing of information from different entities in the regulated sector and better enable the collation of multiple reports of potential money laundering into a single Suspicious Activity Report.
Hundreds of thousands of workers in both regulated and nonregulated sector at risk of facilitating tax evasion
With the Criminal Finances Act now in full force, VinciWorks has been helping businesses prepare with their new course, Tax Evasion: Failure to Prevent. The new law doesn’t just affect the regulated sector; any business that doesn’t have reasonable procedures in place to prevent facilitation of tax evasion could find themselves prosecuted.
So just how prepared are we for the Criminal Finances Act? VinciWorks surveyed over 250 UK companies with a combined workforce of around 430,000 people to find out just how much tax evasion risk companies are exposing themselves to, and if they have started to take action to mitigate those risks.
What you need to do now to prevent facilitation of tax evasion
From today, 30th September 2017, the new Criminal Finances Act is in full legal force. The race is now on for all companies to ensure they have duly considered what reasonable procedures they have in place to prevent corporate facilitation of tax evasion.
If you haven’t done anything yet, don’t worry. It’s not too late, but it’s vital to start working now to ensure your business has a legal defence should the worst happen. Just like the age old saying that your first payment of every month should be to the insurance company, the first task on Monday’s agenda should be to figure out what your company needs to do to prevent tax evasion.
If you haven’t started preparing yet…
- Don’t panic, but get started on a thorough plan of action.
- Form an implementation team that includes senior management involvement.
- Adopt VinciWorks’ free tax evasion policy template and communicate this to all staff.
- Ensure all contractors and third parties are aware of your new tax evasion policy.
On 30th September 2017, the Criminal Finances Act comes into force, as does the requirement for businesses to have reasonable procedures to prevent the facilitation of tax evasion. The law is broad and the net is wide; a business can be prosecuted if a contractor puts a client in touch with a dodgy accountant or the entire modus operandi of the business is to stash away taxable cash.
VinciWorks conducted a survey of 250 UK businesses to find out just how much tax evasion risk companies are exposing themselves to. A quarter of companies still do not have any policies in place to prevent financial crime and one in ten companies in the legal and financial services sector haven’t put in place a whistleblowing policy.
Are your staff sufficiently prepared for the Criminal Finances Act? Ensuring everyone is familiar with your organisations’ procedures to prevent facilitation of tax evasion will go a long way to protect your company from prosecution. We have therefore created a tax evasion code of conduct policy template based on the Criminal Finances Act that can easily be edited and made available to all staff, clients and stakeholders.
VinciWorks has just released a new version of its tax evasion course specifically geared to the corporate sector. While the first version of Tax Evasion: Failure to Prevent is tailored for businesses in the regulated sector, the new version has been modified to better accommodate scenarios that often face companies in non-regulated industries.
More content relevant to diverse industries
VinciWorks corporate users are based in industries as diverse as hospitality, retail and manufacturing. The corporate version of the course provides content that is more directly relevant to the kinds of issues people face in non-regulated sector industries.
Chose from six corporate scenarios
There are now six specifically corporate scenarios to choose from, with up to three included in the course. Scenarios, like everything else in the course, is fully customisable. You can upload your own scenarios or VinciWorks can help you design learning scenarios that are relevant to your company and industry.
The Criminal Finances Act, passed in April 2017, creates a new corporate criminal offence for failing to prevent the facilitation of tax evasion. Under the new law, if an employee or a contractor helps someone evade their taxes, that business can be prosecuted for failing to prevent it from happening.
Implementing reasonable procedures to prevent tax evasion is a key defence against prosecution, but it requires a thorough risk assessment, a top-down commitment and a roll out of staff training. Procedures should be proportional to the risks faced, so a law or accounting firm who gives tax advice to their clients will come out as having a much higher risk.
VinciWorks releases new e-learning course on tax evasion
Does your organisation have “reasonable procedures” in place for preventing the facilitation of tax evasion?
The Criminal Finances Act, passed by Parliament on 27th April 2017, creates a new corporate criminal offence for failing to prevent the facilitation of tax evasion. This places the responsibility on businesses to have “reasonable procedures” in place to ensure none of their employees or contractors are involved in helping someone evade their taxes anywhere in the world. Training on tax evasion is a requirement of the new Criminal Finances Act.
About the course
VinciWorks’ new course on tax evasion will give users an understanding of what “reasonable procedures” are and how to ensure your organisation can ensure compliance with the Criminal Finances Act. Users will also learn the difference between the terms “tax evasion”, “tax avoidance” and “tax mitigation” through interactive quizzes, relevant scenarios and case studies. The course also addresses the challenge of offshore tax jurisdictions and gives guidance on how to spot red flags. Organisations can create personalised guidance for their staff, with information about the what to do and who to contact when there is a concern of tax evasion from a client.
There are two versions of the course available, one 45 minute course for high-risk staff and a 15 minute course for all other staff. You can demo both courses below.
Demo the 15 minute version
Demo the 45 minute version
Checklist of “reasonable procedures” to comply with the Act
On 27th April, the Criminal Finance Bill received royal assent to become the Criminal Finances Act. The Act creates a new corporate criminal offence for failing to prevent the facilitation of tax evasion, placing the responsibility on business to have “reasonable procedures” in place to ensure none of their employees are involved in helping someone evade their taxes.
Guidance from HMRC states that procedures which successfully detect and disclose wrongdoing would likely be found to be reasonable. Timely self-reporting is also an indicator that reasonable procedures are in place.
Reasonable procedures should be guided by the following principles:
1. Risk assessment
Oversight of risk assessment by senior management and appropriate allocation of resources to detect and monitor risk.