‘Alarm bell’ as nine businesses face corporate criminal law probe from HMRC

Pinsent Mason's Andrew Sackey: Businesses need to ask serious questions. Picture: Contributed
Pinsent Mason's Andrew Sackey: Businesses need to ask serious questions. Picture: Contributed
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Tax specialists at Pinsent Masons are encouraging Scottish companies to take heed as nine UK businesses are investigated under revised tax evasion laws.

HMRC is probing a further 21 firms for potential breaches of the new corporate criminal offence of failing to prevent the facilitation of tax evasion. Legal heavyweight Pinsent Masons said the figures should act as a wake-up call to Scottish businesses, regardless of size and business sector.

The investigations and cases currently under review cover UK businesses operating across ten different sectors, including financial services, oil, construction, labour provision and software development.

Andrew Sackey, head of tax fraud investigations at Pinsent Masons, said: “This news should set alarm bells ringing for any businesses in Scotland which have so far put dealing with the corporate criminal offences to the bottom of their compliance to-do list.

“All parts of the financial services sector are clear targets for HMRC’s activities; however infrastructure, haulage, labour service providers and construction businesses also look particularly vulnerable to investigations under these rules because of their reliance on supply chains and sub-contractor networks.”

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The new rules, introduced in 2017, make it a criminal offence if a business fails to prevent its employees or agents from facilitating tax evasion. Corporate boards need not be aware of the conduct undertaken by their employees or subcontractors for an offence to have taken place.

Sackey added: “This is very different to the risks previously faced and businesses in all sectors need to be asking themselves serious questions about whether they are at risk.”