Criminal Finances Act 2017

The Criminal Finances Act came into effect on 30 September 2017 and created a corporate offence for failing to prevent the facilitation of tax evasion offences, both in the UK and overseas. Companies will be guilty of an offence if a person associated with the Company commits a UK tax evasion facilitation offence. The three stages of the offence are:

  • There must be criminal tax evasion by a taxpayer
  • There must have been criminal facilitation of the tax evasion by a person associated with the Company, and
  • The Company failed to prevent its representative from committing the criminal facilitation

A conviction at taxpayer level is not a pre-requisite for bringing a prosecution against a Company and it isn’t necessary for any tax to actually be successfully evaded, the intention itself is sufficient. There must be a deliberate and dishonest act of facilitating evasion. Mere ignorance, accident or negligence will not meet the threshold for commission of an offence.

Breach of the act will be met with severe penalties ranging from confiscation orders all the way up to unlimited financial fines, not to mention the reputational damage that goes along with it.

If reasonable prevention procedures are in place to prevent facilitation, it is possible to establish a defence. To prevent possible action, risk assessments should be carried out alongside regular due diligence checks and commitment from the top.

Here at Zeva, we are wholly committed to complying with the Act and its principles. We carry out regular due diligence checks and risk assessments so that we are aware of who we are dealing with and where any risks may arise. Facilitation of tax evasion is not tolerated at Zeva.