Businesses Must Conduct Risk Assessments To Avoid Falling Foul Of New Tax Evasion Rules

From 30th September, businesses may be convicted of a criminal offence if staff are caught facilitating tax evasion.

The new offences, outlined in the Criminal Finances Act 2017, will make businesses liable for the actions of any employee or associated person who criminally facilitates tax evasion while acting on behalf of the business. The firm can be considered liable and criminally prosecuted, even if the company’s senior management was unaware of the crime.

As a result of the changes, businesses must conduct thorough risk assessments and create a detailed plan outlining new prevention controls.


The new offences will apply to both companies and partnerships. The financial services, accounting, tax advice and legal sectors are most likely to be affected by the new legislation and may face challenges when it comes to implementing preventative protocols.

Businesses may have a defence if they can prove they had taken the necessary steps to prevent tax evasion or can demonstrate that it would be unreasonable to expect procedures to be in place.

Abiding by the new rules may sound troublesome, but the consequences of failing to comply could prove costly. Not only could businesses face a criminal conviction, in turn, this could damage the reputation of the company, attract adverse media attention and prevent the business from operating in regulated markets.

HMRC have increased investments within their specialist fraud investigation unit, suggesting there’s a real push to minimise tax evasion and catch those responsible in the act.