Criminal Finances Act 2017 (‘CFA’)

The CFA came in to force on 30^th September 2017.

and is in four parts dealing with:

• the proceeds of crime, money laundering, civil recovery, enforcement powers and related offences
• the extension of money laundering and asset recovery powers to apply to investigations under the Terrorism Act 2000 and Proceeds of Crime Act 2002 (‘POCA’)
• the creation of two new corporate offences of failure to prevent facilitation of tax evasion and
• minor and consequential amendments to POCA and other legislation.

In this article we outline the nature of the two new offences concerning failure to prevent facilitation of tax evasion.

Failure to Prevent Facilitation of Tax Evasion

The two offences created are failure to prevent facilitation of:

• UK tax evasion offences and
• Foreign tax evasion offences

and are corporate offences, which cannot be committed by individuals, committed by ‘relevant bodies’.

S.44 of CFA states that a ‘relevant body’ means:

• a body corporate or partnership

where a partnership is:

• one within the meaning of the Partnership Act 1890 or
• a limited partnership registered under the Limited Partnership Act 1907
• a similar entity under the law of a foreign country.

and a person acts in the capacity of a person associated with a relevant body where that person:

• is an employee of the relevant body and acting as such
• is an agent of the relevant body and acting as such or
• any other person who performs services for or on behalf of the relevant body and does so in such capacity.

S.45 of CFA states that a ‘relevant body’:

• is guilty of an offence if a person commits a UK tax evasion facilitation offence when acting in the capacity of a person associated with it.

UK tax evasion facilitation offences include the following:

• aiding, abetting or procuring the commission of a UK tax evasion offence
• being knowingly involved in the fraudulent evasion of tax by another person

The offences apply to evasion of both UK and foreign taxes and demonstrate the British Government’s intention to tackle both national and international tax evasion.

Potential Defence

It is a potential defence for a relevant body to prove that when a UK tax evasion facilitation offence was committed it had in place prevention procedures designed to prevent persons associated with it, as described above, from committing such offences.

How Can We Help?

We have an experienced team of solicitors able to provide clear advice in relation to all financial matters, such as asset recovery, proceedings brought pursuant to POCA, Tax investigations brought on behalf of HMRC and allegations of fraud or money laundering.

If you have been contacted by the SFO, HMRC, City of London Police or the FCA we will be able to assist you in responding to applications or attending interviews under caution.

Kangs Solicitors have a proven track record in defending allegations of fraud and money laundering and we rank nationally in both the Legal 500 and Chambers and Partners for our work in Fraud.

Our team is headed by Hamraj Kang who is one of only two solicitors nationally to be ranked as a ‘star individual’ for his work in white collar crime and fraud.

Who To Contact

If you require legal advice please contact any one of the following for a consultation at our offices in London, Birmingham or Manchester:

Hamraj Kang
hkang@kangssolicitors.co.uk
07976 258171 | 020 7936 6396 | 0121 449 9888

John Veale
jveale@kangssolicitors.co.uk
0121 449 9888 | 020 7936 6396 | 07989 521 210

Tim Thompson
tthompson@kangssolicitors.co.uk
07976 258171 | 020 7936 6396 | 07989 521210