Tax evasion happens when a person or company avoids paying taxes, hiding the true state of their finances to Revenue & Customs. This could be the evasion of income tax or VAT, excise duty and custom duty frauds. Alternatively, tax avoidance is where a person or company uses legal loopholes to mitigate their exposure to certain tax liabilities, for example establishing an offshore company.
Are Businesses criminally liable?
Under the Criminal Finances Act 2017, which came into force on 30 September 2017, businesses are now criminally liable if an employee or an associated person facilitates tax evasion whilst providing services on their behalf.
The Act, built on the existing Bribery Act 2010, already deems it a criminal offence for individuals or businesses to evade tax. It is however quite hard for the authorities to prove a business has knowingly colluded in tax evasion, and the new legislation put more onus on the company to disprove involvement.
Failure to comply with this new law can result in significant financial penalties and even a custodial sentence, along with serious reputational damage. This means businesses need to take a risk based approach, implementing processes and procedures to protect themselves.
If an employee or third party individual evades tax, the company must be able to show that it had reasonable prevention procedures in place.
Tax evasion is a serious offence. Putting legal representation in place as soon as possible is important to protect your rights.
We have solicitors who can step in immediately to represent you and deal with investigators and police on your behalf. We provide a first-rate legal service and have an excellent track record of success.
We have criminal defence solicitors in Middlesbrough, Leeds and London. For an initial discussion, ring us on 0113 532 8100 (Leeds), 01642 221 108 (Middlesbrough) or 0203 780 7646 (London) or fill in our Contact Form.