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Further to our previous article surrounding David Cameron and the Panama ‘scandal’, we touched on the new tax evasion offence.

Tax evasion was a key issue raised in this year’s Budget, and since the Panama Papers issues made headlines in recent weeks, the Government has decided to fast track the introduction of a new criminal offence for companies or partnerships to ‘facilitate’ tax evasion.

Facilitation may include acts knowingly performed by anybody associated with a company, including contractors and group companies. Acts may include arranging for company invoices to be raised in the name of an offshore company or referring work to or knowingly creating a structure for tax evasion. The new legislation will make companies or partnerships vicariously liable for the acts of those associated in facilitating the evasion of tax, even if committed by one individual without the knowledge of those in senior positions in the business. It is not expected to apply to tax ‘avoidance’ schemes.

This is intended to force businesses to take additional steps to ensure they are monitoring work undertaken within the organisation, and will mean many businesses, particularly those within the finance sector and regulated sectors will need to undertake a review of their due diligence and money laundering procedures to pick up on the new offences which current procedures may not cover sufficiently.

Whilst the new legislation has not yet come in to force, businesses will need to ensure in advance that their current due diligence procedures are being undertaken meticulously throughout the organisation and that all employees and workers are aware of their regulatory requirements and that they are being followed to ensure that any changes required by the new legislation are introduced as smoothly as possible. Griffin Law have experience in advising businesses on their due diligence and regulatory requirements and are available to assist, feel free to contact us today.