Criminal Finances Act Policy
Effective from December 2019
1.0 Scope and Introduction
HTS (Property & Environment) Ltd (HTS) 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 Company itself avoiding, evading or underpaying tax, but about the Company 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 Companies 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 the criminal facilities action (legislation from the 30th September 2017)
The Overseas Offence:
This requires the same three stages, but there are additional questions to consider determining whether it is an offence under CFA;
1. The criminal tax evasion by a taxpayer (either an individual or legal entity) under existing law
2. The criminal facilities of the tax evasion by an” associated person” of the relevant body who is acting in the capacity (as defined by the Accessories and Abettors Act 1861)
a. Stage a – Would this be a crime if carried out in the UK?
b. Stage b – Does the overseas jurisdiction have the equivalent laws at stage 1 & 2?
3. The relevant body failed to prevent its representative from committing the criminal facilities act.
A successful prosecution could lead to:
• An unlimited fine
• A public record of conviction
• Significant reputation damage and adverse publicity.
There is a defense of having reasonable prevention procedures in place.
A Relevant Body – an incorporated body or partnership
An Associated Person is an employee, agent or other person who performs services for or on behalf of the relevant body. The offence is committed where the facilitation offences are committed by someone acting in the capacity of an associated person. The associated person can be an individual or incorporated body.
2.0 HTS (Property & Environment) Ltd Commitment
The HTS (P&E) Ltd Board have endorsed the following statement:
‘HTS we do not condone and have a zero-tolerance approach to the facilitation of tax evasion. Tax evasion occurs where employees, agents or businesses providing services for or on behalf of the Company omit, conceal or misrepresent information to reduce their tax liabilities.
As part of our commitment to enforcing Criminal Finances Act 2017 HTS, including subsidiary companies, will maintain reasonable and proportionate processes and procedures to prevent fraudulent activity by its staff and anyone acting on its behalf from criminally facilitating tax evasion in the UK and/or overseas.’
All employees of HTS and its subsidiaries have a duty and responsibility to support this approach
3.0 Policy Statements
3.1 HTS has nominated key officers responsible for the information and queries on CFA within our organisation – the key officers for CFA 2017 are the Director of Finance and the Financial Controller.
3.2 The Companies commercial Director is responsible for supply chain transparency and initiatives.
3.3 Training and awareness sessions will be undertaken for all Finance staff and where the University identifies CFA2017 specific risks it will undertake bespoke training and awareness sessions.
3.4 HTS regularly reviews its risks and associated processes and procedures to ensure all steps are taken to prevent facilitation of tax evasion.
3.5 HTS regularly review guidance and legislation (at least annually) in relations to CFA 2017 to ensure it is maintaining an appropriate CFA 2017 policy.
3.6 HTS maintains a register of possible risks of the facilitation of tax evasion by its staff and associates (including agents, contractors, suppliers and intermediaries) , as well as listing controls to mitigate those risks, and any actions required to improve these controls. The register is regularly reviewed and updated, as and when required in relation to the nature of the specific risks.
3.7 Appropriate due diligence will be undertaken on both customers of and suppliers to HTS and its subsidiary companies. This due diligence will be proportionate to the level of perceived risk of the interaction being used to engage in the criminal facilitation of tax evasion.
4.0 Roles & Responsibilities
4.1 The Board
The Board are ultimately responsible:
• Approving the policy that HTS does not condone and has a zero-tolerance approach to the facilitation of tax evasion;
• Adopting and approving a formal policy and response plan for alleged breaches. On the recommendation of the Audit and Finance Committee, Board are responsible for:
• Ensuring that an adequate and effective control environment is in place.
• Ensuring that adequate audit arrangements are in place to investigate suspected concerns.
4.2 Line Managers
Line managers are responsible for implementing this Policy. In particular, this involves ensuring that the zero-tolerance approach to the facilitation of tax evasion is adhered to in their Service area. The practical requirements of line managers are to:
• Understand the potential risks in their areas and to consider whether processes under their control might be at risk.
• Have adequate processes and controls in place to prevent, deter and detect breaches of policy
• Be diligent in their responsibilities as managers,
• Deal effectively with issues and concerns raised by staff including taking appropriate action to deal with reported or suspected breaches.
• Report suspected breaches
• Provide support / resource as required to investigations.
4.3 All Employees
The Company expects all employees to be responsible for:
• Adhering to the policies and procedures of the Company including having a zero-tolerance approach to the facilitation of tax evasion.
• Alerting management and / or other contacts should they have concerns or suspect that the possibility of a breach exists.
• Being aware of the Companies policies and procedures to the extent they are applicable to their role.
5.0 Response to a suspected facilitation of tax evasion
Members of staff are key to ensuring that the Companies stance on facilitation of tax evasion is effective. All staff are positively encouraged to raise any concerns that they may have. All such concerns will be treated in confidence, wherever possible, and will be impartially investigated.
On behalf of HTS (Property & environment) Ltd