Part 1 relates to the proceeds of crime, money laundering, civil recovery, enforcement powers and related offences. If enacted law enforcement agencies will have a range of new powers to request information and seize assets.
Part 2 will ensure that relevant money laundering and asset recovery powers will be extended to apply to investigations under the Terrorism Act 2000 in addition to the Proceeds of Crime Act 2002.
Part 3 will create two new corporate offences to prevent facilitation of tax evasion.
Part 4 contains minor and consequential amendments.
Two new corporate offences to prevent facilitation of tax evasion The two new criminal offences being proposed which apply to corporations (companies and partnerships) are:
failure to prevent facilitation of UK tax evasion
failure to prevent facilitation of overseas tax evasion.
There is currently a range of statutory offences of ‘fraudulently evading’ taxes. The proposed new offences extend these to make it a criminal offence for companies and partnerships to become involved in facilitating tax evasion.
The new corporate offences cannot be committed by individuals - they can only be committed by ‘relevant bodies’, that is, legal persons (companies and partnerships). Moreover, they are only committed in circumstances where a person acting for or on behalf of that body, acting in that capacity, criminally facilitates a tax evasion offence committed by another person.
Failure of relevant bodies to prevent tax evasion facilitation offences by associated persons Clause 37, sub-section (1) creates the offence of corporate failure to prevent the facilitation of tax evasion in relation to UK taxes. The offence is committed by a relevant body where a person acting in the capacity of an associated person commits a tax evasion facilitation offence, that is, criminally facilitates another’s offence of tax evasion.
Tax evasion facilitation offence is defined in sub-section (5) as any offence under the law of any part of the UK committed by facilitating a UK tax evasion offence.
Guidance will be published to assist relevant bodies to devise reasonable prevention procedures (see clause 39 below).
Failure to prevent facilitation of foreign tax evasion offences Clause 38 creates an offence of corporate failure to prevent the facilitation of foreign tax evasion offences. This offence is broadly similar to the offence created in clause 37 in relation to UK taxes.
Guidance about prevention procedures
Clause 39: Guidance about preventing the facilitation of tax evasion offences
Clause 39 requires the Chancellor of the Exchequer to publish guidance about the procedures that relevant bodies might put in place.
Offences: general and supplementary provision Clause 40: Offences: extra-territorial application and jurisdiction – this confirms that it does not usually matter where any act or omission takes place. It does not matter whether the relevant body is formulated under the law of another country, or that the associated person does their criminal act of facilitation overseas: the new offences will be committed.
Thus, where a person acting in the capacity of a person associated to an overseas relevant body commits a tax evasion facilitation offence in relation to a UK taxpayer’s tax evasion offence the new clause 37 offence will be committed and can be tried by the courts of the United Kingdom.