On 21 October 2020, Her Majesty’s Revenue and Customs (HMRC) – the UK’s tax authority – released updated figures regarding the number of investigations that it has open into potential offences under Part 3 of the Criminal Finances Act 2017 (the Act). Part 3 of the Act makes it a criminal offence for businesses to fail to put in place reasonable procedures to prevent their employees and associated persons – i.e. those who act for or on behalf of them – from criminally facilitating tax evasion.
According to the information released by HMRC, as at 13 October 2020, HMRC had 13 investigations into potential offences under the Act and a further 18 cases currently under review. HMRC also report that its investigations span 10 different business sectors, including financial services, oils, construction, labour provision and software development, and that those investigations span all HMRC customer groups from small business through to some of the UK’s largest businesses.
The number and range of investigations appear to show that HMRC is actively enforcing the Act across businesses of all shapes and sizes, even despite the pressures on workload and resources caused by the COVID-19 pandemic. This reach, together with potentially unlimited fines for businesses found guilty of the offences, is a salutary reminder that businesses must take their responsibilities seriously and put in place reasonable procedures to stop the facilitation of tax evasion.