Guidance on self-reporting facilitation of tax evasion
22 Feb 2019
HMRC has published guidance for self-reporting a company or partnership that did not prevent the facilitation of tax evasion, for use by individuals who are the designated authorised representative for that organisation
22 Feb 2019
There is an online facility for authorised representatives to file a report to tell HMRC on behalf of a company or partnership that they have failed to prevent a representative from criminally facilitating UK tax evasion, and that they may be guilty of a corporate failure to prevent offence under Part 3 of the Criminal Finances Act 2017.
A company or partnership that fails to prevent the facilitation of tax evasion commits the corporate criminal offence.
However, it will have a defence if it can demonstrate it put in place reasonable prevention procedures to prevent the criminal facilitation of tax evasion (or that it was not reasonable to expect it to have such procedures).
If the authorised representative self-reports their company this can used as part of the company or partnership’s ‘reasonable procedures’ defence if they are charged with an offence.
It will also be taken into account by prosecutors when they make a decision about prosecutions (for example, deferred prosecution agreements in England and Wales), and reflected in any penalties that are imposed.
HMRC’s guidance points out that self-reporting does not guarantee that a company or partnership will not be prosecuted but it may be taken into account by HMRC, prosecutors and the courts.
Anyone considering self-reporting is advised to consider seeking professional legal advice and read all of the guidance before submitting a report.
In order to use the reporting facility, an individual must have authority from the company or partnership to report on their behalf and can only use this form to report an organisation’s failure to prevent the criminal facilitation of tax evasion.
They will need to give details about the criminal facilitation that the company or partnership failed to prevent, and any tax evasion that may have taken place as a result.
Self-reporting is voluntary. HMRC’s guidance states that the individual and the company or partnership they are acting on behalf of have a right to remain silent.
Those reporting can give as much information in their report as they want. However, they may commit a criminal offence if you give false information or include information that they do not honestly believe to be true.
HMRC advises that self-reporters should only give the information that they already have, and for their own safety, should not try to find out more.
They must not encourage anyone to commit a crime or continue committing a crime to get more information or continue committing a crime themselves to get more information.
HMRC recommends individuals do not tell other people they are sending a report and inform HMRC if they have included information supplied by someone else.
The person who sends the report will not be guilty of failing to prevent the facilitation (despite the fact they are self-reporting on behalf of the company or partnership).
HMRC guidance says in cases where there are concerns over possible money laundering or terrorist financing and the company or partnership they are acting for are in the ‘regulated sector’, self-reporters may have to submit a suspicious activity report (SAR) to the National Crime Agency. This should be done before self-reporting.
HMRC says it should take around 40 minutes to complete the report online, and self-reporters will need a government gateway user ID. Self-reporters will be given a submission reference, for follow up queries from HMRC, and will be able to print out their record after it is submitted.
Report by Pat Sweet