Eight years after the Criminal Finances Act 2017 created new strict liability corporate offences for the failure to prevent the facilitation of tax evasion, HMRC has finally brought its first prosecution. The case, announced on 14 August 2025, centres on Bennett Verby Ltd, a Stockport accountancy firm, accused of enabling fraudulent claims worth more than £16 million in R&D tax credits and COVID-era Bounce Back loans. Six individuals, including a former director, are charged alongside the firm.
The trial, currently scheduled for 2027, will be the first live test of a law long criticised as a “paper tiger” due to HMRC’s reluctance to prosecute. For compliance professionals, this represents a turning point in enforcement, and a preview of what is to come with the new failure to prevent fraud offence.
Tax evasion strict liability for corporate failures
The Criminal Finances Act 2017 created two offences:
- s.45: Failure to prevent the facilitation of UK tax evasion
- s.46: Failure to prevent the facilitation of foreign tax evasion (with a UK nexus)
These Corporate Criminal Offences (CCO) apply to companies, partnerships, and other corporate bodies. If an employee, contractor, or other “associated person” facilitates tax evasion, the organisation can be held criminally liable if it lacks “reasonable prevention procedures.”
Crucially, there is no need to prove intent or awareness by senior management. The model mirrors the Bribery Act 2010 and carries unlimited fines on conviction. The only defence is demonstrating that “reasonable procedures” were in place, or that it was not reasonable to expect such procedures.
Why enforcement has been delayed
Despite wide publicity in 2017, HMRC has not charged a company until now. Why is that?
Evidential complexity – Prosecutors must prove not only the underlying tax evasion but also its facilitation and the corporate failure.
Well-resourced defendants – Professional firms can mount strong defences, making cases lengthy and expensive.
Civil preference – HMRC has favoured recovering tax through civil channels rather than testing the criminal law.
By December 2024, HMRC reported 11 live CCO investigations and 28 further opportunities under review – but no prosecutions. This new case suggests HMRC is recalibrating its enforcement stance.
The choice of a mid-sized accountancy firm to launch a prosecution rather than a global corporate may reflect a strategic decision by HMRC. Securing a conviction in a less complex case could establish precedent before moving against higher-profile players. It also highlights HMRC’s concern about abuse of R&D tax credits, already a known area of fraud risk.
The bigger picture: A new era of “Failure to Prevent”
The Bennett Verby prosecution is not just about one accountancy firm or a single set of fraudulent R&D claims. It forms part of a much wider story about how the UK is reshaping its approach to corporate accountability in economic crime.
For years, campaigners and politicians accused HMRC and other regulators of letting powerful tools sit idle. The failure to prevent the facilitation of tax evasion offence, modelled on the Bribery Act 2010, was meant to drive better corporate behaviour by imposing strict liability on companies whose employees or agents crossed the line. Yet until now, it had never been tested in court. That is beginning to change, and not just with tax.
On 1 September 2025, the new failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act will come into force. This offence takes the same strict liability approach and applies it to fraud, one of the most pressing economic crime risks facing UK businesses. Large organisations will be criminally liable if a person associated with them commits fraud for their benefit, unless they can show they had “reasonable prevention procedures” in place.
At the same time, Companies House is being transformed. Gone are the days when anonymous shell companies could be set up in minutes with little scrutiny. New powers allow the registrar to verify identities, reject suspicious filings, and dig deeper into complex ownership structures. The intention is clear: cut off fraud, money laundering, and tax evasion at the source.
Why the Bennett Verby case is a turning point
The Bennett Verby prosecution marks more than just the first test of the failure to prevent the facilitation of tax evasion offence. It signals the end of HMRC’s long-criticised reluctance to deploy one of its most powerful corporate crime tools. For years, businesses assumed that the offence was effectively dormant; it was a law on the books but not in practice. By choosing to bring this case, HMRC has broken that assumption.
Whether or not the prosecution ultimately secures a conviction, the very act of bringing charges matters. It shows HMRC is prepared to grapple with the evidential and procedural hurdles that have so far discouraged criminal enforcement. It also sets a precedent: once the first case has been charged, the barrier to future prosecutions lowers significantly. Prosecutors can draw on the lessons learned, test the defences companies put forward, and refine their strategies for pursuing corporate liability.
This is unlikely to be a one-off. HMRC already confirmed it has multiple live investigations and dozens more “opportunities” under review. Add to that the political pressure to close the tax gap and the public frustration with perceived corporate impunity, and it is difficult to imagine regulators turning back now. The Bennett Verby case may be modest in scale compared to a global financial institution, but it opens the door. Larger, more complex, and more high-profile cases are certain to follow.
The timing is also significant. The new fraud offence makes the Bennett Verby prosecution something of a dress rehearsal, not just for HMRC but for the wider enforcement community, from the SFO to Companies House and the Insolvency Service. Regulators are sending a message that these offences are not symbolic. They will be used.
What regulators ultimately want is not a flood of convictions but a change in corporate behaviour. Yet the “stick” of prosecution now has teeth. The reputational fallout of being the first company charged has already been immense, even before trial. For other firms, the lesson is clear: enforcement is no longer hypothetical.
Compliance professionals should view this as the start of a new chapter. Prevention frameworks cannot be a paper exercise; they need to be risk-based, evidenced, and embedded. With the enforcement environment hardening and the law expanding, those who move quickly to strengthen controls will reduce both their legal exposure and their reputational risk. Those who do not are increasingly likely to find themselves following Bennett Verby into the dock.
What compliance teams should do to prevent a tax evasion prosecution
For compliance leaders, this case is a clear warning. The days of assuming dormant enforcement are over. Firms should:
Revisit risk assessments – Especially around tax, fraud, and financial services advisory work.
Embed “reasonable procedures” – Policies, training, and controls must be documented and proportionate to risk.
Strengthen oversight of third parties – Contractors, agents, and introducers often pose the greatest exposure.
Align across economic crime risks – Tax evasion, bribery, money laundering, and fraud prevention should be integrated, not siloed.
Evidence compliance – Records of training, policies, investigations, and board oversight are vital for mounting the statutory defence.
