Criminal Finances Bill open for comment

The House of Commons public bill committee is inviting written evidence on the Criminal Finances Bill which is currently passing through Parliament, and which will introduce a controversial new offence of corporate failure to prevent tax evasion

At present, if an individual evades tax and this is facilitated by the advice or actions of those in a corporation, although the individual will have committed a crime and those directly facilitating it could be prosecuted, the corporate entity does not hold any liability.

The bill would create two new offences so that a corporation in this situation could be prosecuted. One is designed to catch companies facilitating the evasion of UK taxes, while the other covers the evasion of foreign taxes facilitated by an entity that has some nexus with the UK (such as a UK-based office), and where there is dual criminality with the UK.

Professional bodies and accountancy firms have previously expressed concern about the proposals, on the grounds that it could be difficult to show sufficient action had been taken to prevent a ‘rogue’ employee from involvement in money laundering or tax evasion.

The bill has a number of other provisions, including giving a court the ability to make an unexplained wealth order to require an individual or organisation who is suspected of direct involvement in or association with serious criminality to explain the origin of assets, where their assets appear to be disproportionate to their known income.

The bill will create new civil powers extending existing cash seizure and forfeiture schemes to include other items which may be the proceeds of crime, such as precious metals and jewels. It also includes extensions to the subject access request (SARS) regime provide for a legal gateway for the sharing of information between entities within the regulated sector, such as banks, and extends the use of disclosure orders to cover instances of money laundering or terrorist finance.

The public bill committee is expected to meet for the first time on 15 November, and will stop receiving written evidence at the end of the committee stage, which is scheduled to be 24 November, but could be earlier.

It says that any submissions should concentrate on issues where the author has a special interest or expertise, and provide any factual information of which the committee should be aware.

Submissions should be sent to crutiny@parliament.uk, and not to the department in charge of the bill.

Details of how to submit evidence on Criminal Finances Bill are here.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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