Professional Ethics in Construction and Engineering

Appendix C Criminal Finances Act Policy

3.1 Scope and Introduction

The Organisation is committed to ensuring that high legal, ethical and moral standards are in place across the organisation.

The Criminal Finances Act (CFA) 2017 came into force on 30th September 2017. Part 3 of the Act introduces a new ‘corporate criminal offence of failure to prevent the facilitation of tax evasion’. The legislation applies to all business and all taxes. This particular offence is not about the Organisation itself avoiding, evading or underpaying tax, but about the Organisation failing to prevent its employees/ agents/ associates from facilitating the evasion of tax by another party.

All UK corporates are affected and can be subject to prosecution for the facilitation of tax evasion by ‘associated persons’.

There are two corporate offences – a domestic tax fraud offence and an overseas fraud offence. A UK incorporated body can be prosecuted for either offence. While the overseas offence is slightly narrower in scope, it still essentially means that universities need to consider the potential for overseas tax evasion as well as UK tax evasion.

The UK Offence:

This requires three stages:

1. The criminal tax evasion by a taxpayer under existing law.
2. The criminal facilitation of the tax evasion by ‘an associated person’ of the relevant body who is acting in that capacity (as defined by the Accessories and Abettors Act 1861).
3. The relevant body failed to prevent its representative from committing ...