Legislation creates corporate offence of failure to prevent tax evasion

The Criminal Finances Bill received royal assent on 27 April. It introduces a corporate offence of failure to prevent the facilitation of tax evasion. In essence a business may face an unlimited fine and a criminal conviction if any employee facilitates such fraud.

Global institutions with a UK presence could also be subject to UK criminal proceedings if an employee anywhere in the world is found guilty of failing to prevent tax evasion.

The legislation requires the government to publish guidance for corporate bodies and partnerships. It will be a defence if a company can show it has ‘reasonable prevention procedures’ in place.

According to Pinsent Masons the results of a YouGov survey of 1 189 senior decision makers shows 76% of UK businesses are unaware of the new legislation.

James Siswick partner specialising in risk consulting at KPMG said: ‘From September all financial institutions will...