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At the March 2015 Budget the government announced that it would make it a crime for corporations to fail to put in place reasonable procedures to prevent associated persons from criminally facilitating tax evasion. The intention being that relevant bodies should be criminally liable where they fail to prevent those who act for, or on their behalf from, criminally facilitating tax evasion.
The Corporate Criminal Offences (CCO) for the failure to prevent the facilitation of tax evasion were introduced by Part 3 of the Criminal Finances Act 2017.
0.2 Information released
With potentially unlimited fines for organisations found guilty of the offences, organisations must take their responsibilities seriously and put in place reasonable procedures to stop the facilitation of tax evasion. This is not about simply increasing the number of corporate prosecutions but changing industry practice and attitudes towards risk, encouraging organisations to do more to prevent tax crime happening in the first place. HMRC does not have a numerical target for these offences but will prioritise risks and sectors that will have the most impact on changing behaviour.
The new offences came into effect on 30 September 2017 and are applicable to organisations that failed prevent the facilitation of tax evasion from that date on. HMRC already has 30 potential CCO cases underway, see below for further details. Results will be made public as and when it is appropriate to do so.
As at 31 December 2019
HMRC has 9 live CCO investigations with a further 21 opportunities under review across 10 different business sectors, including financial services, oils, construction, labour provision and software development
these investigations and opportunities sit across all HMRC customer groups from small business through to some of the UK’s largest organisations
The number and spread of investigations clearly demonstrate that HMRC is actively enforcing the legislation across all tax and duty regimes and across organisations of all shapes and sizes.
0.3 Further information
HMRC intends to update this information biannually with a similar Freedom of Information release. Taxpayer confidentiality will prevent HMRC from providing additional detail on those subject to CCO investigations.
You can read government guidance ‘Tackling tax evasion: Government guidance for the corporate offences of failure to prevent the criminal facilitation of tax evasion’ for more detailed information about the legislation.
If you believe your organisation may have committed these offences you can tell us about it through the corporate self reporting portal.