035 Why You Need To Know About Corporate Criminal Offence

The recruitment sector pays salaries to millions of temporary workers and contractors, and this volume of money makes it a target for potential tax evasion.  In 2017 new legislation was introduced, the Criminal Finances Act, which makes failing to prevent tax evasion a ‘Corporate Criminal Offence’.  Some contractors have unknowingly been involved in tax evasion, so we chatted to Sam Dean who has lead responsibility for HMRC’s corporate criminal offence work.

Sam gives us an easy to understand overview of the legislation, what to do if you think you might be involved in facilitating tax evasion, and details of HMRC’s current work in this area – which includes the recruitment sector.

There are lots of key takeaways from this episode, here are just a few of ours:

• The more guidance and communication that HMRC disseminates, the less someone can argue that they didn’t know about it;
• Without due diligence processes in place it’s hard to see how a company could mount any defence;
• The danger is thinking it’s someone else’s job in the supply chain to do the due diligence, but actually everyone should be doing it;
• Some companies are pulling out of mergers & acquisition deals if they are concerned about CCO risk;
• Waiting to see if competitors are prosecuted before taking action is incredibly risky – it’s a conscious decision that is not a defendable position.

Resources:

Corporate Criminal Offence self-reporting portal

Reasonable preventative procedures (HMRC guidance)

HMRC Guidance on supply chain due diligence

Check if you might be involved in tax avoidance (HMRC guidance and tool)

Call for evidence about the umbrella market

Mini umbrella fraud – HMRC guidance

About Sam Dean

Sam joined HMRC in 2009 and his career has centred around enforcement and investigation areas, mainly in and around offshore non-compliance. In his role as Assistant Director in Fraud Investigation Services, Sam is HMRC’s lead for all matters relating to Corporate Criminal Offence.  In recognition of his achievements, Sam won Outstanding Young Professional at the Tackling Economic Crime Awards in 2021.