September Deadline for Criminal Finances Act Compliance

It’s now less than a month until the UK’s Criminal Finances Act comes into force on 30th September. This is a really significant piece of legislation which gives HMRC a global mandate to pursue the possible facilitation of tax evasion anywhere in the world should it involve a UK tax liability. As such, it will pull in a huge variety of businesses and sectors, yet many firms are still very underprepared for its introduction.

Marie Barber, Managing Director of Tax Consulting and Accounting Services at Duff & Phelps, here comments for Lawyer monthly on the Act, its implications and what businesses need to do to ensure compliance:

“Transparency, fairness and accountability have been dominant themes in taxation for some time. The Criminal Finances Act is a continuation of this and we should expect tax authorities to quickly wield these new powers to target corporate facilitators wherever they are around the world. This new legislation is not dissimilar to other legislation designed to influence corporate behaviour, such as the Bribery Act and the GDPR, and as such requires a similar approach to assess risk and put measures in place to prevent the targeted activity from occurring.

“The legislation requires more than an inclusion of a policy or a statement and instead require businesses to identify areas of risk, considering proportionate steps to mitigate any facilitation of tax evasion. Businesses need to have completed this assessment before implementing prevention policies and procedures. It is not possible to do one before the other. HMRC appreciate the tight timeframe and do not expect 100% compliance by 30th September, but they do expect businesses to have performed the risk assessment and have the policy and procedure process well underway. The Criminal Finances Act is extremely far-reaching and will put the spotlight on a huge range of businesses, meaning many people have a lot of work to do in less than a month to ensure their firm is compliant.”

Leave A Reply