12 Feb 2020
The taxman is investigating 30 companies, including big corporations, under sweeping powers to clamp down on tax dodging, The Times has learnt.
Nine criminal inquiries have been opened by the high-level fraud unit of Revenue & Customs (HMRC) while 21 other firms are being assessed for failing to prevent tax evasion. Customs officers carried out searches, issued court demands for documents and made arrests at the end of last year.
Under new white-collar crime laws, companies are automatically guilty if they fail to prevent the criminal facilitation of tax evasion. The provisions, under the Criminal Finances Act 2017, eliminate the need for prosecutors to show that there was a “controlling mind” at board level.
Simon York, head of HMRC’s fraud investigation service, said the investigations were “groundbreaking” and involved companies of all sizes, “right up to some of the largest corporates . . . across sectors including financial services, construction, labour providers, oil dealers and software developers”.
Previously the need to establish that someone at director level was responsible for misconduct had made it hard to tackle tax evasion at the biggest companies, Mr York added. “It has always been theoretically possible to prosecute large firms, but [it is] very difficult because once you got to board level the email chains and everything else would just go cold.”
The difference now was the emphasis on “corporate responsibility”, he said. “We don’t have to establish intent. We don’t have to say it’s deliberate conduct. They are guilty of facilitating tax evasion unless they can show they have strict procedures to prevent it.”
Mr York declined to identify any of the firms under investigation but said there could be prosecutions within two years. If found guilty, companies could face unlimited fines.
Investigators are looking at financial services firms whose products encourage people not to declare all their income, construction giants that use off-the-books labour on building sites and software providers with programs that skim off profits.
By Sean O’Neill, The Times, 11 February 2020
Read more at The Times
RiskScreen: Eliminating Financial Crime with Smart Technology
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet