The Criminal Finances Act of 2017 is an act introduced by the UK Parliament to make amendments in the proceeds of Crime Act 2002 and to bring expansion in the provisions to make it easier to seize funds obtained through criminal means. The new Criminal Finances Act 2017 targets tax evasion, money laundering, and corruption. The Act reflects the government's proactive approach to seize criminal assets and is a legislative tactic to reduce financial crimes. It expands on the current legislation to offer special enforcement powers and additional measures to law enforcement agencies and partners to combat tax evasion, corruption, money laundering and financing of terrorism.
Following are the significant changes introduced by the Act:
One of the main aspects of the Criminal Finances Act is the introduction of the two new corporate tax offences. These new corporate tax offences extend the obligation for tax evasion from the person and any facilitators to the company/organisation with a substantial risk of criminal prosecution and fines. The primary function of a tax collection agency is to minimise tax frauds in the country. During the recent ten years, HMRC has alarmingly increased the prosecutions for tax fraud, from around 258 convictions in 2006/07 to 1,135 in 2015/16. These two new tax offences have been created so that a corporation may be held liable or prosecuted under the following situations –
These new offences are applicable to companies, partnership firms, and limited liability partnerships failed in preventing the criminal facilitation of tax evasion. These new rules do not apply to individuals as they can be prosecuted under the existing laws. Following criteria has been formulated for failure to prevent the criminal facilitation of tax evasion –
Eventually, relevant bodies need to contemplate whether the actions of their employee, agent or individuals who offer services for or on behalf of your organization have the motive, the chance, and the way to facilitate tax evasion offences criminally, and if so, how this risk may be tackled. For a well-established business, the law prompts it to tread in illegal waters precariously. Since a company will be liable for the actions of the representative acting on its behalf, the law evidently highlights the extent of penalisation and fines wrongful deeds might have. Whether in the UK or overseas, any failure to prevent legal compliance is liable to strict probe and subsequent penalty.
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