UK Corporate Criminal Offences of Failing to Prevent Facilitation of Tax Evasion Come into Force

On September 30, 2017, two new criminal offences came into force under the UK’s Criminal Finances Act 2017 (“CFA”).

The offences are intended to make it easier for the UK to prosecute corporations and partnerships for the role they play in the facilitation of tax evasion.

The new offences are notable not only for criminalizing omissions rather than positive actions, but also for their wide territorial scope. Their reach can extend in certain circumstances to organizations outside the UK and to non-UK tax evasion.

In practice, the CFA may require UK and non-UK businesses to put in place systems designed to prevent employees, and others who act for or on behalf of the business, from facilitating tax evasion.