It follows on from an earlier consultation and aims ‘to overcome the difficulties in attributing criminal liability to corporations for the criminal acts of those who act on their behalf’. It applies to all businesses of all sizes. The offence as outlined in the consultation response document will have three stages:
criminal tax evasion by a taxpayer
criminal facilitation of this offence by a person acting on behalf of the corporation
the corporation’s failure to take reasonable steps to prevent those who acted on its behalf from committing the criminal act outlined at stage two.
The draft guidance in the document sets out a number of principles:
proportionality of reasonable procedures
top level commitment
communication (including training)
monitoring and review.
The proposed guidance applies to all businesses from small to large ‘corporations’. Under proportionality of reasonable procedures it is highlighted that ‘what constitutes reasonable procedures for a corporation to adopt to prevent persons associated with it from criminally facilitating tax evasion will be proportionate to the risk of criminal facilitation faced by the corporation’.
It is stated that this will depend on the nature, scale and complexity of the corporation’s activities. It is expected that procedures will be adopted and that these be ‘formal policies adopted by a corporation to prevent criminal facilitation of tax evasion by those acting on its behalf, and practical steps taken to implement these policies, the enforcing of compliance with the policies, and the monitoring of the policies’ effectiveness’.
To emphasise the proportionality principle it’s highlighted that the simplest communication may be ‘oral briefings to communicate policies’.
Please do consider taking the time to respond to this consultation, either directly to HMRC, or via email to ACCA (we will collate all responses and share with HMRC).