The FCPA Blog | By: Nick Henderson | August 17, 2017:
If an employee or a contractor helps someone evade their taxes, that business can be prosecuted for failing to prevent it happening. The Criminal Finances Act applies to any business either based in the UK, or with a UK nexus, meaning they have staff or an office in Britain.
Ever since the Panama Papers exposed the underground nexus of global tax evasion, regulators have been trying to figure out how to get ahead of it. In the UK, the Criminal Finances Act was passed in late April 2017.
The legislation will be fully implemented in September, so firms have very little time to get themselves prepared by putting in place reasonable procedures.
What does the Criminal Finances Act do?
If an employee or a contractor helps someone evade their taxes, that business can be prosecuted for failing to prevent it happening. The Criminal Finances Act applies to any business either based in the UK, or with a UK nexus, meaning they have staff or an office in Britain.
The Criminal Finances Act or CFA also covers tax wherever in the world it may be owed.
Criminal facilitation can occur even without knowledge of the business. If an employee or contractor is helping facilitate tax evasion, then the business can be prosecuted if they fail to have reasonable procedures in place to prevent it.
Implementing reasonable procedures is a key defense against prosecution. But creating those procedures requires a thorough risk assessment, a top-down commitment, and a roll out of staff training.
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