The Criminal Finance Bill 2016/2017 (‘the Bill’), which seeks to amend POCA, received its second reading before Parliament this month and it is anticipated that it is likely to come into force in Autumn 2017.
The Bill is split into four parts and, inter alia, looks to:
- Reform the Suspicious Activity Reporting regime
- Create Disclosure Orders used as part of money laundering investigations
- Create new criminal offences for corporate bodies relating to tax evasion
- Introduce Unexplained Wealth Orders
- Enhance Civil Recovery measures and other enforcement powers.
Timothy Thompson of Kangs Solicitors looks specifically at the introduction, through Part 3 of the Bill, of the proposed new corporate offence of:
‘Failure To Prevent The Facilitation Of Tax Evasion’ | Kangs Fraud Solicitors
The existing law in relation to tax evasion will remain unchanged and, should the Bill become law, it will simply extend the scope of persons who can be prosecuted following tax evasion.
The proposed new law is based on the current corporate offence of ‘Failure of commercial organisations to prevent bribery’, dealt with in Section 7 of the Bribery Act 2010, whereby a body corporate or partnership commits an offence if it fails to prevent an associated person (someone acting for the company and not just an employee) from criminally facilitating the commission of either:
- A UK Tax evasion offence; or
- A foreign tax evasion offence, which is an equivalent offence under the laws of the foreign jurisdiction.
There is no offence if there were reasonable prevention procedures in place, meaning, procedures designed to prevent associated persons from facilitating tax evasion offences, or in all the circumstances, it was not reasonable to expect any prevention procedures to have been put in place.
HMRC Guidance | Kangs Tax Advisory Lawyers
HMRC has published guidance (HMRC Guidance), to assist corporate bodies with the above issues setting out six principles regarding reasonable prevention procedures:
- Risk assessment
- Proportionality of risk-based prevention procedures
- Top level commitment
- Due diligence
- Communication (including training)
- Monitoring and review
How Can Kangs Solicitors Help You? | Kangs Tax Fraud Solicitors
The team is headed by the firm’s principal, Hamraj Kang who is one of only two lawyers in the country to be awarded ‘star individual’ status by the leading law directory Chambers & Partners.
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