New rules coming into effect this week aim to clamp down on businesses who fail to prevent tax evasion. As part of The Criminal Finances Act 2017, the legislation means that from 30th September, a company could be liable if their employees or associates are involved in facilitating tax evasion, even if the company aren’t aware of the crime itself.

 

This will have a significant impact on companies such as recruitment agencies, or anyone involved in referring taxpayers to financial, accountancy or payroll solutions.  For example, if a consultant intentionally refers someone to a non-compliant scheme or provider, where the taxpayer doesn’t pay the correct taxes to HMRC, this would be defined by the new rules as ‘facilitating tax evasion,’ meaning the agency could face penalties.

 

Agencies must also be cautious in cases where a consultant receives an incentive for referrals, as this will constitute tax evasion if not disclosed via their tax return.

 

With the rise of non-compliant schemes since April, agencies will need to be extra vigilant about those they work with in order to avoid prosecution. We therefore urge agencies to complete due diligence on all providers, and to only work with those who can prove they are fully-compliant.

To find out more about the new legislation, including ways to prepare, read our guide here.