Failing to prevent the facilitation of tax evasion: Simmons & Simmons response

Simmons & Simmons has responded to the Government’s consultation on the proposed introduction of a new corporate criminal offence of failing to prevent the facilitation of tax evasion.

Update

For Simmons & Simmons response to the further consultation on the draft legislation and guidance to implement the new offence, see Failure to prevent the facilitation of tax evasion consultation.


On 16 July 2015, the Government released a consultation document inviting comments from interested parties on its proposal to introduce a new corporate criminal offence. The new offence would take the form of “failing to take reasonable steps to prevent the facilitation of tax evasion”. The purpose of the proposed new offence is to make it easier for the Government to hold companies to account for the actions of their agents, where those agents facilitate tax evasion, but without the direct involvement or knowledge of senior management. In the same way that a professional who dishonestly assists a customer to evade tax is guilty of the tax offence in which he or she becomes complicit, the Government believes that the corporation which employs this professional and fails to take reasonable steps to prevent their offending should also face prosecution.

Simmons & Simmons has responded to the consultation in detail, pointing out that the measures proposed would require very careful amendment to produce legislation that is both workable in practice and safeguards the interests of organisations undertaking bona fide commercial transactions. In particular, Simmons & Simmons argues that the legislation should be closely targeted at this stage and that detailed guidance on what constitutes reasonable steps will be required from HMRC and should be consulted upon in advance.

For a copy of Simmons & Simmons’ response to the consultation, please click here.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.