Tax Evasion - New Corporate Offences Under Criminal Finances Act 2017

Employers are advised to take note and update their contracts of employment and policies to ensure that they are protected from liability.

The Offences

The offences are committed if a corporate entity or partnership (eg an employer) fails to prevent the facilitation of UK tax evasion or overseas tax evasion by an associated person (eg an employee or consultant).

A relevant corporate entity or partnership can defend themselves against a claim by proving that they had in place a reasonable prevention policy or that, in the circumstances, it was not reasonable to expect them to have any prevention procedures in place.

What Should You Be Doing?

In line with the guidance published by HMRC, we therefore advise employers to:

• update their contracts of employment and service contracts where relevant, to make it a specific contractual requirement that employees and others providing their services do not engage in facilitating tax evasion
  
  
• If applicable, provide all employees with a policy on the prevention of facilitation of tax evasion and to ensure that employees and those providing services are aware of and comply with the policy

For further information and advice on drafting a tax evasion clause or tax evasion policy, please contact Rebecca Fox, in our Employment Law team, on 01923 919 323.