Criminal Finances Act 2017

The Criminal Finances Act 2017 will give law enforcement agencies and partners, further capabilities and powers to recover the proceeds of crime, tackle money laundering, tax evasion and corruption, and combat the financing of terrorism.

From 30 September 2017, the Criminal Finances Act 2017 will – as well as a number of other new powers – make companies and partnerships criminally liable if they fail to prevent tax evasion by either a member of their staff or an external agent, even where the business was not involved in the act or was unaware of it.

A prosecution could lead to conviction, unlimited penalties and reputational damage.

A business may avoid criminal liability where it can show that it had implemented reasonable prevention procedures, or where it can show that in the circumstances it would have been unreasonable or unrealistic to have expected it to have had procedures in place. Prevention procedures should be implemented by considering the following six principles:

• Risk assessment
• Proportionality of risk-based prevention procedures
• Top level commitment
• Due diligence
• Communication (including training)
• Monitoring and review

Firms are advised to review their current practices and procedures to minimise any risks, and to put in place appropriate monitoring and training of staff at all levels.

You can look at the factsheets from HMRC on the Criminal Finances Bill here.

For more information or to discuss the potential impact on your business, please contact one of our team.