Complying with corporate criminal offence rules

Deloitte, the Federation’s tax advisor, explains how housing associations should comply with corporate criminal offence rules.

28 February 2018

On 30 September 2017, HMRC introduced rules which may impose criminal liability on companies and partnerships where they fail to prevent employees, suppliers, contractors and other ‘associated persons’ from facilitating tax evasion.

Businesses are deemed liable unless they can demonstrate that they had ‘reasonable procedures’ in place to prevent this. Housing associations fall within the scope of ‘businesses’ affected by the new legislation.

In order to demonstrate ‘reasonable procedures’, there are six guiding principles to consider:

  • risk assessment
  • proportionality of risk-based prevention procedures
  • top-level commitment
  • due diligence
  • communication (including training)
  • risk monitoring and review.

Your organisation should now have completed a risk assessment, implemented your own reasonable procedures, and be able to show that this has taken place. It is also important that you have processes in place to review and update the procedures in the event of any significant business changes and over time.

We understand that HMRC has briefed its officers on the new rules and we would expect to see corporate criminal offence compliance being considered in future tax risk reviews.

Working closely with the Federation, and a number of housing associations, we have given considerable thought to how these rules will apply to the sector.

Please let John Butler or Will Jeffwitz know if you would like to discuss the implications for your organisation.