Failure to prevent the facilitation of tax evasion

Since 2017 it has been a crime to fail to prevent the facilitation of tax evasion.   That means you could go to prison, not because you committed tax fraud: but because you did not do enough to stop someone else’s tax evasion.

From 30 September 2017 there has a corporate criminal offence of “failure to prevent the facilitation of tax evasion”.   This means that the owners and senior management of a business could be committing a criminal offence if its employees, or other associated persons, help any other person or business to commit tax fraud:  even if the facilitator does not directly benefit from the scam.  The corporate nature of the offence means a company could be found guilty even if the senior management of the business was not involved and was unaware of what was going on.

The offences apply to both companies and partnerships. They apply to all businesses, wherever in the world they are located, in relation to evasion of UK tax. And to businesses with a UK connection in respect of the facilitation of evasion of non-UK tax.

There is a defence against this charge: if businesses can prove they had reasonable prevention procedures in place to prevent the facilitation of tax fraud, or that no such reasonable safeguards could have been adopted.

What does it mean for me?
Businesses should implement proportionate procedures, controls, and checks so as to demonstrate, if necessary, that all reasonable steps had been taken to prevent staff and contractors from helping anyone else commit tax fraud.  For example: one client of ours uses a large amount of sub-contract labour.  That business is now insisting on being given the sub-contractor’s HMRC UTR number and getting them to sign a declaration that they have registered as self-employed with HMRC.

How Could Lynam Tax Enquiry Experts Help Me?
Lynam Tax Enquiry Experts have a vast amount of practical experience in managing all types of tax investigations and tax enquiries.  We have successfully persuaded HMRC to drop criminal charges in a number of cases, and also assist specialist defence solicitors in cases which do end up in court; when we have been able to substantially reduce the amounts of money being sought by HMRC (which can also result in lower, or non-custodial, sentences).

We can advise you on the best course of action and, if appropriate, help you manage any necessary disclosures, or obtain first class legal representation.  We will help you get the best possible outcome for you, your business and your family.

*For a free, private, no obligation consultation, call

Paul Lynam: 0845 643 9997

Andrew Nutbrown: 07718 778710