A new Bill, The Criminal Finances Bill, has been introduced into the House of Commons, which proposes, amongst other things, to create two new corporate criminal offences of failure to prevent facilitation of tax evasion (UK and foreign tax evasion).
UK tax evasion covers any offence of cheating the public revenue, and facilitation therefore includes, more broadly, aiding and abetting, and other less developed contributing offences. Under the proposed section 37, a company or partnership will be guilty where a person associated with it commits a UK tax evasion facilitation offence when acting in that capacity.
It will be a defence to show that, at the time of the offence, a business had in place reasonable prevention measures or that in the circumstances it would not have been reasonable to have prevention measures in place.
Under the proposed section 38 (facilitation of foreign tax evasion), the offence is almost identical save that the offensive conduct must (i) amount to an offence under the law of another country, (ii) relate to a breach of duty regarding tax imposed by law in that country, and (iii) be regarded by courts in the UK as amounting to conduct where the defendant was knowingly concerned in, or taking steps with a view to, the fraudulent evasion of the tax in question.
HMRC has responded to the consultation on the draft clauses and provided some draft guidance on recommended prevention procedures, covering the six guiding principles of:
- risk assessment
- proportionality of prevention procedures
- top level commitment
- due diligence
- communication (including training)
- monitoring and review
A copy of the draft guidance can be found here.