The Criminal Finances Act 2017 means companies can be found liable for failing to prevent the criminal facilitation of tax evasion by anyone or any organisation that’s providing a service for or on their behalf.
Despite coming into force in September 2017, a survey of senior individuals in 1,000 UK companies and partnerships conducted for HMRC by Ipsos revealed that just a quarter of businesses had heard of the legislation.
The report found that larger companies were more likely to be aware of the Criminal Finances Act at 58%, compared to medium, small and micro business, which came in at 30%, 26% and 24% respectively. Unsurprisingly, companies in the financial and insurance sector were the most aware at 58% compared to other sectors, which stood at 24%.
HMRC states that companies need to assess the risk of being exposed to the facilitation of tax evasion by those providing services on their behalf. Large businesses were three times more likely than micro businesses to have assessed this risk, at 57% compared to just 19%.
Additionally, only 8% of the respondents had organised internal or external training related to corporate policies and procedures to prevent the facilitation of tax evasion in the last 12 months.
The results are undoubtedly concerning for HMRC which is looking to reach a position where staff in senior positions actively promote a culture throughout their business that facilitating tax evasion is unacceptable.
The Law Society provides guidance for businesses on the Criminal Finances Act 2017 which you can read here. Stay tuned to the Mango Pay blog for all of the latest news and insights affecting your business today.