Number of Tax Evasion cases has doubled

A Freedom of Information (FOI) request has revealed that in the three years to 2015-16 the number of tax evasion cases lined up to be prosecuted has nearly doubled to 1,135. In 2015, HMRC was given a target to triple to 100 the number of criminal investigations into “serious and complex” tax crimes by 2020, targeting wealthy individuals and corporations.

With the introduction of the Criminal Finances Act 2017, a corporation can be found guilty of facilitating tax evasion, if an associated body commits the tax evasion if the corporation does not have appropriate procedures in place. An associated body can be a person, such as an employee, or another company who performs services for or on behalf of your corporation e.g. your stationery supplier. If found guilty of facilitating tax evasion the corporation faces an unlimited fine and risks not being able to bid for public contracts.

The associated body who commits tax evasion is likely to do so in a covert manner. Therefore, the only valid defence is to prove to HMRC that your company has valid policies and procedures to discourage the facilitation of tax evasion.

Aspire Comment

The FOI figures has revealed that HMRC are devoting more resources to tackle tax evasion in order to meet its targets. To protect your business from falling foul of the Criminal Finances Act 2017 it is important that your business has the relevant procedures in place. There is no doubt that HMRC will be quick off the mark in starting investigations under the new law.

If you require a Criminal Finances Act Policy procedure or would like a discussion regarding this topic, please contact Aspire.