The Criminal Finances Act 2017
Article Publish Date: Friday 9 March 2018
In 2017, the UK Government introduced the Criminal Finances Act 2017 (Part 3). The Act has created two new criminal corporate offences focusing on ‘the failure to prevent’ the facilitation of tax evasion.
All financial institutions have to make sure that the ‘associated persons‘ they deal with (including staff and third party associates) aren’t involved in facilitating tax evasion. The Act holds financial institutions (or ‘relevant bodies’) accountable for the actions of any associated persons should they be involved in the facilitation of tax evasion and can be prosecuted under this new legislation. It’s important that both us here at Aviva and you, our insurance brokers, are aware of this Act. We really hope this article helps you understand what you and your business needs to be doing.
Who can be prosecuted?
Employees, agents or those who offer services on your behalf are all considered part of your business under the legislation and therefore, you’re responsible for them and their activity. This means actions directly impact your business. Only a ‘relevant body’ can commit the new offences.
What are the offences?
- Introduces criminal penalties for relevant bodies where an associated person is deliberately involved in facilitating UK tax evasions. Please note, they don't have to be in the UK for this crime to be committed.
- Introduces criminal penalties for relevant bodies where an associated person is deliberately involved in facilitating UK tax evasion where there is a link to the UK.
The offence stages
1. Criminal tax evasion by a taxpayer
2. Deliberate and dishonest facilitation of tax evasion by an associated person of the relevant body
3. Failure of the relevant body to prevent the criminal act
The offence is a strict liability offence; therefore if stages one and two of the offences are committed then the relevant body will have committed the new corporate offence, unless it can prove that it has put reasonable prevention procedures in place to prevent this from happening.
At Aviva, we take our moral and legal responsibility to prevent tax evasion very seriously. We actively work with our associated partners and employees to make sure that we’re not enabling anyone to use us, our services or products to facilitate tax evasion.
If you have any questions on this topic, the measures we are putting in place or how you can help prevent the facilitation of tax evasion,
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