HMRC’s recent response to a Freedom of Information request has revealed that as at 31 December 2019 it has 30 potential Corporate Criminal Offence (CCO) investigations under way. HMRC have highlighted that these investigations sit across all the customer groups, from small businesses to the UK’s largest corporations.
The number of investigations currently open, and the variety of business types and sizes which are affected shows HMRC are actively looking to enforce the CCO legislation.
The investigations span 10 different business sectors, including financial services, oils, construction, labour provision and software development. The range of businesses, both in size and sector, targeted by HMRC’s approach again reaffirms the importance for all companies and partnerships considering their exposure to CCO. This is not a sector-specific risk and the consequences of getting it wrong are disastrous.
The CCO rules were introduced in September 2017 as part of the Criminal Finances Act (CFA) and are applicable to organisations who fail to prevent the facilitation of tax evasion by those acting for or on behalf of their organisation. Fines for breaching the legislation have the potential to be unlimited, and breaching the rules poses a reputational risk.
What do the HMRC Corporate Criminal Offence figures mean for you?
If you have not yet considered the CCO rules, or are unsure whether your current policies and procedures are implemented thoroughly enough, now is the time to act.
We know many companies are yet to take action on HMRC’s six guiding principles to have and maintain reasonable prevention procedures. It is more important than ever to examine your approach to CCO and tax risk and governance in general. This is not a simple box-ticking exercise.
Our tax risk management specialists across the country can support with risk assessment, prioritisation and improvements to all aspects of governance, including the CCO, Senior Accounting Officer and BRR+. The team is supported by a range of specialists across direct and indirect tax.