Six steps to fend off ‘failure to prevent’ tax evasion charges
By Will Grahame-Clarke, 18 May 18
A law firm outlines how financial advice firms can protect themselves from the criminal offence of failing to prevent tax evasion.
Advisers have been warned that all but the most mundane tax planning puts them at risk of criminal and civil penalties.
The only defence for a firm is to show it had ‘reasonable prevention procedures’ in place.
Lawyers Norton Rose Fulbright have highlighted six guiding principles which follow the guidance of the Bribery Act 2010.
“There may be some efficiency in developing procedures alongside those already in place (such as for the Bribery Act 2010) but it will not be a matter of piggybacking: an entity must put in place ‘bespoke prevention measures’ based on the ‘unique facts of its own business’ and the risks identified,” Norton Rose notes.
The six guiding principles are:
Principle 1 – Risk assessment
Organisations must assess the nature and extent of their exposure to risk: ‘sit at the employee’s desk’ and ask whether they have a motive and opportunity to facilitate tax evasion.
Financial services, tax advisory and legal sectors are identified as sectors with particular risk.