Failure to Prevent the Facilitation of Tax Evasion: What You Need to Know.

The Criminal Finances Act of 2017 serves to criminalise the failure of businesses to prevent the facilitation of tax evasion. The two offences created under this new legislation have a basis in the Bribery Act 2010, and mean that your company can be held responsible for illegal tax-related activity undertaken by contractors or other organisations with which it has professional dealings – whether the tax in question is:

  1. Owed to the UK government or
  2.  Overseas tax

In order to ensure that your company will not be investigated by Her Majesty’s Revenue and Customs as a result of another organisation’s attempts at tax evasion, it is worth examining the new act to see what actions to take.

What Constitutes the Facilitation of Tax Evasion?

Under the new act, the offence is defined thus: “a relevant body (B) is guilty of an offence if a person commits a UK tax evasion facilitation offence when acting in the capacity of a person associated with B”.

Will My Business Be Prosecuted?

To find out whether you are liable to fall foul of facilitation of a tax evasion inquiry, you and your management team must first understand the stages that would constitute an assessment of your company.

  1. The uncovering of proof that criminal tax evasion has taken place. This evasion may have been undertaken by an individual or a body professionally connected to your organisation.
  2. The discovery that this offence was facilitated by an individual, group or department within your organisation, and that this facilitation took the form of aiding, abetting, counselling or procuring the aforementioned evasion of tax.
  3. The historical refusal or neglect of your organisation to put in place processes and implement procedures that may have prevented the aforementioned evasion of tax from taking place. Those investigating your company’s potential failure must consider whether it would have been reasonable to expect you to have had such measures in place at the time.

Investigators can only consider the final stage once they are satisfied that your circumstances meet the requirements in stages one and two.

If your company has been found lacking, or at fault, throughout all three stages, then it is liable to be prosecuted for failure to prevent the facilitation of tax evasion.

What Are the Six Guiding Principles of Failure to Prevent the Facilitation of Tax Evasion?

While policing the activities of all the individuals and companies connected with your organisation may seem considerably difficult, there is in fact an official set of six guiding principles of adherence to the new legislation in existence – created by HMRC and designed to help organisations improve their understanding of the activities of their partners and service providers and tighten their security against any potential fraud or tax evasion.

Principle One: Risk assessment

When developing your risk assessment, your company should first take into account how likely it is that any of the individuals or organisations acting on your behalf or alongside you would evade the correct payment of tax. This will require considering that party’s potential motives, means and opportunity – asking questions such as:

“Why would this company commit taxation fraud?”

“Can we think of ways in which they would be likely to do it if so?”

“Is it at all possible that this would happen?”

You should then work towards a strong risk management strategy, which should continue to be reviewed for as long as your company and the third party do business together.

This is the most vital step, as not only will it shield your organisation against the dangers of entering into a contract with a potentially fraudulent body, but it will also provide you with a defence in response to the aforementioned third stage of an assessment.

Principle Two: Proportionality of risk-based Procedures

Preventative procedures should be proportionate to the risk you/your company faces. Your organisation should be proactive in the implementation of its chosen approaches of persons associated with you committing evasion facilitation offences. However, while it is tempting to make sure that your back is covered when it comes to new government legislation, you must ensure that the plans you intend to put in place are achievable.

Your management team must consider the scale of the risk in order to construct procedures that are straightforward and proportionate. For example, close, extensively recorded supervision of each agent/employee is not always achievable without creating unmanageable amounts of extra work. The new offences do not require you to undertake excessive procedures, so simpler alternatives should be sought.

The scale and complexity of your companies activities are important factors. The reasonableness of prevention procedures should take account of the level of the control supervision the organisation is able to exercise over a particular person activity acting on your behalf. A combination of formal policy and practical steps to ensure such a policy is implemented and monitored is a good step.

Principle Three: Top Level of Commitment

All changes that are to be made via the implementation of new procedures should become embedded into the working life of your business and taken as seriously as possible so as to adopt a no-tolerance attitude towards facilitation of tax evasion.

A committed approach should be adopted from the “top-down”, with the CEO and management leading by example, so that diligence and care can spread throughout the senior ranks of your organisation. The prevention of tax evasion facilitation should be the duty of your entire staff, and of top-level management in particular.

The involvement of senior management will also enable a greater and clearer communication of the existence of your prevention processes to external bodies. Partners, contractors and any other individuals with whom your company works will be made more acutely aware of your position on the facilitation of tax evasion if it is championed by the CEO in person.

Principle Four: Due Diligence

Proper due diligence procedures should be applied and followed by persons who perform services on behalf of your company to reduce risks, and quantifiable steps taken in order to recognise and prevent criminal behaviour. This approach should not only be applied to companies newly entering into your organisation’s list of partners and contractors but should also be applied in hindsight.

Now that the Criminal Finances Act has been initiated, all of your company’s external contacts and service providers should be made subject to due diligence checks, however long your history with them may be. You may believe that a certain industry poses a higher risk than others of being utilised for tax fraud. Consequently increased levels of checks should be applied to address such risks.

Principle Five: Communication

Every member of your company should have a practical understanding of both the significance and implementation of your prevention policy. Not only should each individual be confident in the inner workings of your prevention policies these new processes, but your organisation should also be able to effectively communicate them to contractors, service providers and partners.

Regular training should be provided where possible in order to pass on the message that tax fraud will not be tolerated at any level, and no person or body that engages in such activities will be able to continue their dealings with your company. In addition, news feeds communicating your companies anti-tax evasion policy can act as a deterrent to those who seek to use your company for illegal activity

Principle Six: Monitoring and Review

Your systems and procedures should never be considered a finished product but should be adjusted, adapted and improved in response to the ongoing observation. When you first set them out, you should work into all documentation an agreement that the procedures must be revised and reconsidered once a set period of time had passed.

If your company is a large multinational, personal implementation of preventative measures by seniors may not be practical and instead, a sub-department being delegated may be seen as reasonable.

What are the Penalties for Failure to Prevent the Facilitation of Tax Evasion?

Your business could receive an unlimited fine for failing to prevent the facilitation of tax evasion. The minimum amount to be recovered will be 100% of the amount of tax the third party neglected to pay. Criminal convictions can also be imposed and recovery actions such as confiscation orders may be taken.

Of course, when it comes to the expected timescale for implementing new processes and procedures, the government and HMRC will take into account the nature and size of your company and the resources it is able to draw upon. However, it is expected that you will do all in your power to ensure that a well-considered plan of action is put in place at your company’s earliest possible convenience.

What Types of Activities Could Put My Business at Risk?

Sector: If your organisation is part of a particular sector, such as financial services or law, it is immediately more likely to be investigated for facilitating tax evasion.

Value of projects, products or services: Should you be dealing with high net worth companies and service providers, they and you are perhaps more likely to be the subject of taxation investigations than other organisations.

Transparency: If a partner or contractor connected to your company gives the impression of being unreasonably covert with regards to financial activity, there is a possibility that suspicions will be raised.

System complexity: If a supply chain or transaction process seems from the outside to be purposefully opaque or complex, investigators may believe that the companies involved are masking fraudulent financial activity. Therefore, it is highly advisable to keep fiscal processes as straightforward and above board as possible.

History: If there is a history of the products or services provided by your company or its partners being utilised in a way that facilitates tax evasion, this again may raise the suspicions of HMRC and could see you investigated for the facilitation of tax evasion.

In any of the above circumstances, there should be no cause for concern as long as you have ensured that your organisation has undertaken a full risk assessment and has put efficient processes in place.

Contact our Business & Tax solicitors team for full support and advice.

I’ve Been Accused Of Tax Evasion – What Do I Do?

If you’ve been accused of tax evasion, chances are you’ll be feeling distressed. It’s important to keep in mind that tax fraud and evasion is a serious crime and that burying your head in the sand does not mean it will go away eventually. In fact, ignoring the situation will only serve to make everything worse in the long run.

There are many reasons why someone could find themselves falsely accused of tax evasion – maybe you placed too much trust in your accountant when they mentioned a ‘foolproof’ scheme. Or maybe you overlooked something when completing your tax return. Whatever the reason for the accusations, we strongly advise seeking professional legal advice from a specialist tax solicitor.

Keep in mind: HMRC are legally allowed to name and shame criminal tax avoiders who owe more than £25,000.

Could I go to prison for tax evasion?

Tax evasion is a serious crime that has seen a crackdown from the law in recent years. If found guilty, you could be facing a prison sentence, especially if this is not your first offence. The maximum penalty for tax evasion is seven years or an unlimited fine.

HM Revenue and Customs now have greater powers to obtain information regarding your tax affairs and have specialist solicitors and barristers to go after suspected tax evaders. This is why we strongly recommend that you act quickly and hire the services of a professional who will fight your corner.

What will happen if I am accused of tax evasion?

HMRC will want you to pay the money that you owe them in unpaid income tax, but they will also want to see a prosecution if you’re found guilty during an investigation for tax. They may even want to make an example of you to deter others from the temptation of income tax evasion, money laundering, etc., especially if you owe a lot of money.

If you’ve been accused of tax evasion, contact one of our experienced tax solicitors today. We have decades of experience in dealing with HMRC, and can advise you accordingly for your HMRC inspectioninterview under caution and everything else.

What is The Criminal Finances Act 2017?

On the 30th September, the Criminal Finances Act 2017 came into force. This was a government response to the infamous “Panama Papers” Scandal and promises to crack down on firms that have failed to prevent tax evasion from taking place. If you’re a firm owner who is facing prosecution for your involvement in a tax evasion scheme, please contact us and we will advise you of your next steps.

What Should I Do If I’ve Been Accused Of Tax Evasion?

The first thing you should do if you’ve been accused of tax evasion is to seek legal advice and representation immediately. The correct legal support will help you throughout your investigation and your solicitors will be able to advise you on your next steps.

HMRC & Border Force Seized Goods – Your Questions Answered

If you have purchased or ordered items to be delivered from abroad, or you are shipping items out of the UK, they will be required to pass customs checks. It is at this stage where, on occasion, items may be seized by border officials.

Depending on their nature, goods may be more or less likely to be seized and put at risk of either forfeiture or condemnation by HMRC or Border Force.

Items most likely to be seized include:

  • Alcohol
  • Cigarettes and other tobacco products
  • Vehicles (for personal use and business car stock)
  • Offensive weapons where there is no licence, and self-defence items such as pepper spray
  • Endangered species of animal or plant, or species that are likely to be diseased
  • Meat or dairy products from outside the EU
  • Items that are considered indecent or obscene
  • Items that are suspected to be the proceeds of crime
  • Items for which the correct VAT or duty has not been paid, or for which any paperwork – such as certificates or licences – is missing or incomplete

Here, we explain what to do upon receipt of a Border Force Notice 12A – a warning letter about seized goods – and guide you through ways to challenge the seizure of goods.

What Happens During a Goods Seizure?

Goods seizures can take place under a number of circumstances. If you are accompanying the items in question as you cross the border into, or out of, the UK, you will be stopped and the items seized in your presence. The reason for the seizure will be explained to you, and you will then be handed a Notice 12A, otherwise known as a Border Force Seizure Notice.

If you are importing or exporting goods through a courier or other agent, the goods will be seized at the border, and the notice of seizure will then be sent to you.

This document will disclose details of the confiscation and the contact details of HMRC and Border Force, with whom you can pursue asset recovery. It’s important to take note of which of these two organisations have seized your items so that you can send correspondence to the right place.

If you have been the subject of the confiscation and freezing of assets under the Proceeds of Crime Act 2002 or the Police and Criminal Evidence Act 1984, the notice will also inform you of the actions you may take if you do not agree with the seizure.

What Happens if my Goods are Seized by HMRC?

Often, it can simply be a case of sending a formal notice of claim to HMRC to formally request your items back. On other occasions, you will have to seek legal advice, especially if you think that the seizure of goods is unfair. On rare occasions, you may be arrested if customs or border force staff consider you complicit in a crime, and in these circumstances it’s certainly worth seeking legal assistance.

What are Your Options When You Receive a Warning Letter About Seized Goods?

Usually, an organisation whose goods have been confiscated must appeal against HMRC seizure of goods within one month of receiving notice. If you do not do so within this window, your items will be liable for forfeiture or condemnation.

Means you may use to challenge the seizure of goods include:

  • Challenging the legality of the confiscation through a Notice of Claim.
  • Sending a “restoration letter” requesting the return of the item or items that have been seized. It is possible to send this after the one month limit.
  • Both of the above – sending the notice of claim and then the restoration letter, so that your items may be returned to you while the notice is being processed.
  • It’s important to be aware that after alcohol seizure or the confiscation of other perishable goods such as cigarettes following the sending of a Notice 12A, HMRC are likely to dispose of these items as soon as they can. Anything that isn’t perishable will begin to be disposed of after 45 days.

Remember, both a restoration letter and a Notice of Claim should include:

  • Your company’s name and address
  • Details of the items you wish to be returned, including quantities, size, colour, brand, etc.
  • The reference number you received at the time of seizure
  • Documentation that proves you own the item in question – e.g. receipts
  • An explanation of why you believe the goods should be returned to. For example, you should include a licence or certificate of ownership if an item was originally confiscated due to a lack of one. In a Notice of Claim, you should also explain why you believe the seizure in question was not legal.

If your assets were seized by HMRC, this correspondence should be sent to:

HM Revenue and Customs

Specialist Investigations

Appeals and reviews team S0777

PO Box 29992


G70 6AB

Or, if you intend to appeal Border Force restoration policy enforcers, you should send it to:

National Post Seizure Unit

Border Force

3rd Floor

West Point

Ebrington Street




Why Might I Have Been Sent a Notice 12A by HMRC?

Some of the circumstances under which your goods can be seized may include occasions where incorrect excise duty was paid, the contents of a package were incorrectly described or the items in question are in some way prohibited or restricted, or are believed to be the proceeds of crime.

Can My Goods Be Searched When They Are Seized?

Yes, HMRC and Border Force agents are allowed to conduct a search if they have reasonable grounds to suspect there are prohibited or restricted goods present, or goods on which duty has not been paid. They may also look through documentation and inspect electronic devices.

Excise Duty and Exports

If items have been imported from within the EU, they should not be subject to excise duty. Therefore, items seized on the basis that incorrect duty was paid should not have been confiscated in the first place, and making this argument will likely see you win your case. If the goods have been legally imported from another continent and the correct duty was paid, it’s also likely that you will win your case.

Items from outside the EU can be imported as long as they are within an amount known as a “statutory allowance”. For alcohol, this amount translates as 16 litres of beer, 4 litres of non-sparkling wine, 1 litre of spirits or beverages containing over 22% alcohol or 2 litres of fortified wine, sparkling wine or other drinks with an alcohol content of up to 22%.

In terms of tobacco, it is possible to import up to 200 cigarettes, 100 cigarillos, 50 cigars or 250g of tobacco.

Any other goods may be worth up to £390 before you are required to pay any duty. If you go over your allowance, you will be required to pay 2.5% on any goods worth up to £630. The amount of payment for goods above £630 will depend on the type.

If any goods you are planning to export from the UK to anywhere within the EU have been seized, it may be that you did not have proof of the correct licences required, or the proforma invoice you have completed is incorrect – for example, the amount of VAT charged is wrong.

When exporting goods outside of the EU, you may be required to have obtained further licenses, and you will also need to have made all necessary export declarations to customs through the National Export System (NES) before the item can be transported. Correct VAT, import taxes and duties must have been paid on the items, and any transport procedures must be adhered to. Failure to comply with these regulations may result in items being seized.

Implications of a Notice of Claim Following a Border Force Notice 12A

After a Notice of Claim is received, “condemnation proceedings” will begin. These usually take place at the Magistrate’s Court, at a hearing you will be expected to attend. If it is found that the items in question have been legally seized, you will then forfeit them completely.

On the other hand, if the court is relatively satisfied by your argument, it may be ruled that the goods can be restored to you if you agree to adhere to certain conditions.

If the goods have been imported from another EU country and can feasibly be argued as being for personal use or to be given to another individual or as a gift, it’s likely that any confiscation such as a tobacco or alcohol seizure will be seen as unlawful as long as the items themselves are legal to import and own in the UK, and you will win your case.

If the court denies your request for the seized items to be restored to you, it is possible to appeal that decision by asking that the case is reviewed by an officer of greater seniority, and if that officer then denies your request, the case may be taken to an independent tribunal.

Of course, if your business and your relationship with customers rely on smooth import and export processes, delays can prove extremely costly. That’s why it’s vital to contact legal advisors and resolve the case as soon as possible. At the same time, it may be worth examining what caused the issue this time, in order to prevent it from happening again in the future.

Disagreeing with customs for the HMRC seized goods 

It can also be argued that the articles in question should never have been seized at all. This will involve a court appearance.

Customs can also seize items or money under the Proceeds of Crime Act 2002 or the Police and Criminal Evidence Act 1984 (PACE) if they suspect that they are evidence of a crime. If this occurs, the owner will receive a warning letter about HMRC seized goods which will also detail the steps to be taken if they wish to contest this action.

DBT & Partners solicitors can assist you with any of the above eventualities.


It may be that criminal allegations arise against you following HMRC seizure of goods. This may be because the items have been seized under the Terrorism Act or the Proceeds of Crime Act 2002, and that you are now a suspect in a criminal case due to your dealings with them. Because of this, it is vital that you get in touch with legal representatives as soon as you receive a Notice 12A.

In conclusion:

  • Immediate action is vital upon the receipt of a Notice 12A. You will usually only have one month to appeal a seizure.
  • Your goods may have been seized because they were restricted or prohibited in the UK Otherwise, they may have been accompanied by incorrect documentation, you may have paid the incorrect amount of VAT or duty on the goods in question, or it may have been suspected that they were the proceeds of crime.
  • To claim your items back, you may either send a restoration letter or a Notice of Claim, or both. The former is a request for the authority in question to review why they seized the relevant items and to consider their return, and the latter is a request for a court hearing as the result of a seizure that may have been illegal.

If you have received a warning letter about seized goods, whether it refers to vehicle, tobacco or alcohol seizure or the confiscation of any other items of property, it’s important that you contact DBT & Partners today. We can assist you in the drafting of a restoration letter and sending a Notice of Claim, and will represent you at any hearing. Our experienced solicitors will help you to present your case and argue that the HMRC seizure of goods in question was not lawful.


What Is The Penalty For Tipping Off Money Laundering?

If you are concerned that you may soon be investigated for offences related to money laundering – for example, tipping off money laundering, which includes informing somebody that they are being investigated – or you know of someone else who has these concerns, you’re likely trying to work out what to do next.

First of all, it is, of course, vital that you seek out the best legal representation possible to ensure that you are well protected before the investigation proceeds any further. Here’s a little more information you may require to help you understand what you’re up against, and how to fight it in the most effective way.

What Is Money Laundering?

The Cambridge English Dictionary defines money laundering as “the crime of moving money that has been obtained illegally through banks and other businesses to make it seem as if the money has been obtained legally”.

What is The Maximum Penalty For Assisting A Money Launderer?

Any money laundering sentence – whether it be passed down to the perpetrator of the crime itself or to any individuals assisting said perpetrator – can consist of up to 14 years of jail time, depending on the severity of the crime and the circumstances under which it was committed.

You can reduce the likelihood of receiving a harsh sentence by informing the police of any suspicious activity that you may know of regarding finances, as failure to report money laundering will be considered aiding and abetting serious criminal activity.

If this considerable jail sentence is not passed down, sizeable anti-money laundering fines may be put in place alongside a shorter custodial sentence or a community order. Again, this depends on the nature of the offence. DBT are solicitors who specialise in money laundering. If you feel you need support with money laundering investigations, please click here.

What Defines Tipping Off A Money Launderer?

The Proceeds of Crime Act: Section 33A defines tipping-off offences as:

1) A person commits an offence if –

a) the person discloses any matter within subsection (2);

b) the disclosure is likely to prejudice a money laundering investigation that might be conducted following the disclosure referred to in that subsection; and

c) the information on which the disclosure is based came to the person in the course of a business in the regulated sector.

2) The matters are that the person or another person has made a disclosure under this Part –

a) to a constable,

b) to an officer of Revenue and Customs,

c) to a nominated officer, or

d) to a member of staff of the National Crime Agency authorised for the purposes of this Part by the Director-General of that Agency,

of information that came to that person in the course of a business in the regulated sector

3) A person commits an offence if –

a) the person discloses that an investigation into allegations that an offence under this Part has been committed is being contemplated or is being carried out;

b) the disclosure is likely to prejudice that investigation; and

c) the information on which the disclosure is based came to the person in the course of a business in the regulated sector.

What Is The Penalty For Tipping Off A Money Launderer?

The maximum penalty for tipping off a money launderer is an unlimited fine and up to five years imprisonment.

What is the Proceeds Of Crime Act 2002?

Under the statutes of the Proceeds of Crime Act 2002, money laundering itself is only one of a number of criminal offences in this field. Criminal offences relating to this field include:

  • failure to report money laundering, knowingly handling or hiding the proceeds of crime (which refers to illegally obtained bank notes or coins of any currency, all cheques, bank drafts or amounts held in bank accounts)
  • being unable to clearly prove that the source of the income in query was legal when questioned
  • being involved in any other activity that was knowingly undertaken in relation to money laundering or terrorist financing

Also known as the POCA 2002, this set of legislative orders also allows any “ill-gotten gains” to be recovered by law if it can be proved that the means used to obtain them were unlawful.

I’ve Been Accused Of Assisting Or Tipping Off Money Laundering – What Do I Do?

The first step to take is to begin noting down or recording anything that may constitute proof that you are not guilty of this offence. Recorded phone calls, text messages and emails can all constitute valuable evidence. At the same time, look into trusted criminal lawyers or solicitors who specialise in financial crime and fraud. They will help you put together the defence you need to clear your name.

For further information and assistance regarding money laundering, get in touch with our team of experts via our handy online contact form. We will assist you in any way we can.