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Corporate Criminal Tax Offences

Q. My accountant has just sent me details of new Corporate Criminal Offences, which seems to imply I must check that my clients and suppliers are not tax evaders. Does this really apply to 1 man limited company contractors? What do I need to do about it?

A. The Criminal Finances Act 2017 makes companies & partnerships criminally liable if they fail to prevent tax evasion by either a member of their staff or an external agent, even where the business was not involved in the act or was unaware of it.

For a firm to be liable under the Act, there must have been:

  • Stage one:  criminal tax evasion by a taxpayer (either an individual or a firm) under existing law.
  • Stage two:  criminal facilitation of the offence by a representative of the firm.
  • Stage three:  the firm failed to prevent its representative from committing the criminal act outlined at stage two.

If your company does not employ staff or engage external sub-contractors etc, then it is difficult to see how the Act applies to your situation. However, further guidance can be found by here: Tackling tax evasion: Government guidance for the corporate offences of failure to prevent the criminal facilitation of tax evasion.

By Contractor Doctor


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1 thought on “Corporate Criminal Tax Offences”

  1. Colin

    And what if a freelancer does employ a sub-contractor occasionally?

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