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Failure To Prevent Tax Evasion: Criminal Finance Act 2017

Tue 13th Feb 2018
On 30th September 2017, a new legislation was issued under the Criminal Finances Act 2017 which now makes businesses liable for criminal acts carried out by employees who encourage individuals to commit or assist in tax evasion, i.e. customers or suppliers.
Under the new legislation, the business will be liable if these results are found, even if the senior management of the company are not aware or involved in the acts.
There are many businesses who are still unaware of this new legislation but from September 2017, they are responsible for monitoring and enforcing the Act, to reduce the risk of criminal prosecution. The rules apply to UK and non-UK tax.
Although tax evasion is already an offence, it has not been possible in the past to attribute criminal liability however the new rules will target deliberate and dishonest behaviour across the board, focusing on who is accountable.
With the introduction of the IR35 (off-payroll working) rules last year, there has been much focus on contractors and self-employed personnel which will continue to take place with the latest tax evasion Act. There are companies who offer undisclosed incentives or bonuses to individuals or cash incentives for referrals or services and this is the type of action that the prosecution is looking for. Deliberate exchanges to avoid tax payments.
Due diligence must be performed when using contractors or supplies to support a business as the responsibility and ownership will come down to the business owner if caught out with the Tax Evasion Criminal Act.
We believe that trust and relationships are important to combat the prevention of fraud. Knowing that you are working with supplies and contractors that you can trust will benefit you and your business. Be aware of what is happening around you and always investigate further if you are unsure or suspect tax evasion activity. Having won most of their tax avoidance cases in 2016/2017, the HMRC have increased intelligence to catch all parties falling under the tax avoidance schemes. Is it really worth facing the unlimited fines and the possibility of two years in prison?
Here at NWM as an umbrella company, we are proud to provide a service that is fully compliant, professional and crystal clear with all latest rules and legislations. Our dedicated team members offer a transparent service and advice system so you know that under us, we will do all we can to ensure compliance.
If you have any questions about the latest Criminal Finance Act 2017 or would like to find out more about our services and how we can help you in your business, contact us today.
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