New Legislation is due to be introduced under the Criminal Finances Act 2017 which will make businesses liable for crimes committed by staff members who encourage or assist tax evasion by other individuals, e.g. suppliers or customers.
Under the legislation, companies will be liable to cases where senior management were either unaware or uninvolved in the acts. These new regulations relate to both UK and non-UK tax, and are expected to be put into action in September 2017.
Notably, there are three different stages to the offences:
1) Criminal UK or non-UK tax evasion by a taxpayer under the current law.
2) Criminal facilitation of the offence by a person associated to the organisation.
3) The respective organization failed to stop the associated person from committing the criminal offence at Stage Two.
The law firm, Pinsent Masons, that 72% of the legal sector and 58% of the financial services and accountancy industry in the UK, were unaware of the new legislative changes. According to the source, it would be in the businesses’ best interest to implement substantial prevention procedures in order to reduce the risk of criminal prosecution.