The Criminal Finances Act has been in force since 2017. While there have been no prosecutions as yet, HMRC are currently investigating thirteen potential violations of the Corporate Criminal Offence of failing to prevent the facilitation of tax evasion, with another 18 cases under review.

This offence is broad-reaching. It can be committed whether the company is UK-based or established under the law of another country, or whether the associated person who performs the criminal act of facilitation is in the UK or overseas.

While it is vital to have reasonable procedures in place such as staff training, it’s also crucial to make sure you, or anyone in your business, isn’t actually involved in facilitating tax evasion.

What are the high risk areas?

There are many ways facilitation of tax evasion can occur. Even simple, every-day actions could enable tax evasion to occur. Take a look at this common list of tasks and think about how frequently you engage in these activities.

  1. Processing payments to third parties
  2. Dealing with vendors and suppliers
  3. Conducting due diligence on third parties
  4. Communicating and dealing with third parties based in offshore jurisdictions
  5. Opening bank accounts
  6. Operating IT infrastructure
  7. Providing assistant or secretarial services third parties
  8. Conducting currency conversions
  9. Sending money to foreign locations
  10. Providing tax advice
  11. Providing company director services
  12. Providing nominee services
  13. Setting up or maintaining services in offshore jurisdictions
  14. Being involved in property transactions

If you are regularly involved in two or more of these areas, you have high exposure to potential facilitation of tax evasion. This means you might often encounter scenarios in your day to day job that could present a high risk of facilitating tax evasion. 

What you can do about it

You can mitigate these risks by paying close attention to certain identifiable red flags. Being vigilant about potential risks of facilitating tax evasion is vital to protect you and your business from the risk of being embroiled in tax evasion.

Training is one of the most effective reasonable procedures any prosecutor would look at when reviewing a breach of the law. Remember that some staff should be trained more than others. Anyone who is high risk, e.g. they engage in two or more of the high risk areas on a regular basis, should be undertaking comprehensive tax evasion training at least once a year.

VinciWorks’ new tax evasion course

VinciWorks’ upcoming new tax evasion course takes a modern, fresh approach to tax evasion training with a focus on industry-specific guidance, role-relevant scenarios and an interactive, engaging approach to ensuring all staff have the skills and understanding they need to prevent tax evasion.

To pre-order a license of the course, or to be updated when the training is released, complete the short form below.