HM Revenue & Customs (HMRC) publishes tackling tax evasion: government guidance for the corporate offences of failure to prevent the criminal facilitation of tax evasion. The guidance sets down six guiding principles for companies and organisations to follow.

Part 3 of the Criminal Finances Act 2017 (CFA), creating the corporate offences of failure to prevent facilitation of UK and foreign tax evasion, comes into force on 30 September 2017..

Similar to the existing failure to prevent offence under the Bribery Act 2010, it will be a defence for the company or organisation to prove that when the offence was committed they had in place prevention procedures. Prevention procedures are defined as procedures designed to prevent persons acting in the capacity of a person associated with the company from committing tax evasion facilitation offences.

Section 47 requires the Chancellor of the Exchequer to publish guidance about the procedures that relevant bodies might put in place.

This guidance, originally published in draft form in October 2016, was published in its final form on 1 September 2017.

The guidance aims to:

• Provide guidance to relevant bodies on how they might conduct an assessment of the risk of their representatives criminally facilitating tax evasion.
• Help relevant bodies adopt a more effective, risk-based and outcomes-focused approach to mitigating the risk of associated persons criminally facilitating tax evasion.
• Assist consideration of whether the reasonable procedures defence is available.
• Enhance the understanding of government expectations and help relevant bodies to assess the adequacy of their existing systems and controls and remedy deficiencies.
• Assist trade bodies in the formulation of more detailed sector-specific procedures.

The guidance is based around six principles, almost identical to those in the Bribery Act guidance.

The finalised guidance contains minor amendments made since the October 2016 draft guidance was published. These changes are intended to reflect minor changes made to the draft clauses that became Part 3 of the Criminal Finances Act 2017.

The final guidance also includes some additional examples which were supplied by businesses during the consultation.

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