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Data provides a timely reminder that organisations of all sizes should have procedures in place to identify and mitigate tax evasion facilitation risks, says ICAEW.
The corporate criminal offences (CCO) for failure to prevent the facilitation of tax evasion were introduced by Pt 3, Criminal Finances Act 2017. Offences are committed where a relevant body fails to prevent an associated person criminally facilitating the evasion of a tax. This applies regardless of whether the tax evaded is owed in the UK or in a foreign country.
The legislation focuses on the failure to prevent the crimes of those who act for, or on behalf of, a corporation. The onus is on the relevant body to demonstrate that it has put in place a system of reasonable procedures that identifies and mitigates its tax evasion facilitation risks.
HMRC regularly publishes data about the number of live cases and opportunities it is reviewing under the CCO legislation. The purpose of the legislation is to drive behavioural change, although the fines for organisations found guilty of offences are potentially unlimited. ICAEW members are reminded of their responsibilities in this area: the need to review their organisation’s attitude to risk and to put in place reasonable procedures to stop the facilitation of tax evasion. Members are also reminded of the requirement to comply with ICAEW’s Professional Conduct in Relation to Taxation (PCRT).
Over time, HMRC’s updates have shown that its investigations and opportunities have spanned a range of business sectors, from small business through to some of the UK’s largest organisations. The named sectors include financial services, oils, construction, labour provision, software development, software providers, accountancy and legal services, and transport.
In 2020, 12 investigations or opportunities related to businesses in the financial sector. In 2021, around one third of the investigations and opportunities covered some of the UK’s largest organisations.
At 1 January 2023, it remains the case that no charging decisions have been made under the legislation. However, some investigations have found other tax and regulatory offences that are being pursued.
The table below summarises the evolving picture of HMRC’s CCO investigations:
| Date of HMRC update | Number of live investigations | Number of live opportunities under review | Number of opportunities reviewed and rejected to date | Number of business sectors |
| 1 January 2023 | 9 | 26 | 77 | 11 |
| 13 May 2022 | 7 | 21 | 69 | 11 |
| 27 May 2021 | 14 | 14 | 40 | 10 |
| 13 October 2020 | 13 | 18 | 33 | 10 |
| 31 July 2020 | 10 | 22 | 10 | |
| 31 December 2019 | 9 | 21 | 10 |
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