An employer may commit an offence if it fails to prevent an employee, agent or any other person who is performing services for the organisation, from criminally facilitating the evasion of tax, whether the tax is owed in the UK or in a foreign country.

That person commits a “UK tax evasion facilitation offence” by:

• Being knowingly concerned in, or taking steps with a view to, fraudulent tax evasion by another person.
• Aiding, abetting, counselling or procuring the commission of a UK tax evasion offence.
• Being involved, in all and part in the commission of an offence consisting of, being knowingly concerned in, or taking steps with a view to, the fraudulent evasion of tax.

An employer will have a defence if it can prove that, when the offence was committed:

• It had in place such prevention procedures as it was reasonable in all the circumstances to expect it to have in place that were designed to prevent an associated person from committing an offence; or
• It was not reasonable in all the circumstances to expect it to have any such procedures in place.

Such an offence can be tried summarily or on indictment and is punishable by a fine. A supplementary offence is set out to cover situations that involve the solicitation of foreign tax evasion.

We advise employers to insert a clause into employment contracts requiring employees not to engage in the facilitation of tax evasion and introduce a new “Anti-Facilitation of Tax Evasion Policy” which may assist in meeting the “reasonable prevention procedures” defence.

Please contact Humphries Kirk if you would like to introduce such a clause and/or an Anti-Facilitation of Tax Evasion Policy.