Failure to prevent facilitation of tax evasion—top-level commitment

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Practice notes

Failure to prevent facilitation of tax evasion—top-level commitment

Published by a ��˾��ҹ�� Practice Compliance expert

Practice notes

The Criminal Finances Act 2017 (CFA 2017) introduced a corporate offence of failure to prevent facilitation of tax evasion, which came into force on 30 September 2017.

The government has issued guidance which sets out its expectations on compliance systems. This Practice Note is based on the final legislation and guidance.

The government guidance should be considered and applied in a risk-based and proportionate way. This includes taking account of the size, nature and complexity of your organisation. A small organisation and a large multinational organisation may implement the principles in very different ways: what is reasonable for a small business in a low-risk sector may be entirely unreasonable for a large business in a high-risk sector.

The Law Society has also published Criminal Finances Act 2017 guidance for law firms, which was approved by the chancellor on 21 November 2018. According to the Law Society, the chancellor considers that its guidance is consistent with the Government guidance for the corporate offences of failure to prevent the criminal facilitation of tax evasion.

The

Jurisdiction(s):

United Kingdom

Key definition:

Due diligence definition

What does Due diligence mean?

Due diligence means that all reasonable precautions were taken and all due diligence was exercised to avoid the commission of the offence. This requires the defendant to produce evidence of the system and procedures it has devised in an effort to avoid unfair practices.

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