Failing to Prevent Tax Evasion – a new criminal offence!

From 30th of September 2017 the Criminal Finance Act will create a new criminal offence of failing to prevent the facilitation of tax evasion.

This means that businesses, including recruiters, will be held responsible for the activities of their employees and associated persons even if the senior management were not involved or aware.

A business will be guilty of this new offence, and potentially receive an unlimited fine and criminal record if:

  • A tax payer commits an offence of criminal tax evasion (for example a contractor uses an umbrella company that does not pay the correct taxes or an agency consultant receives a gift or incentive and doesn’t declare it for income tax and NI).
  • A third party commits an offence of criminal facilitation of tax evasion (for example a recruitment consultant introduces a contractor to the non-compliant umbrella company who will help them evade tax).
  • The third party is connected to the business as an “associated person”. (For example a recruiter who employs the recruitment consultant).

If the first two are proved, the recruiter will only have a defence if they have reasonable processes in place to prevent the facilitation of tax evasion.

As a consequence, it’s more important than ever for a recruiter to know that they’re only working with compliant providers.

Graham Fisher, Group Chief Executive of Orange Genie, said “Obviously if no tax evasion offence is committed, the recruiter is not at risk under these new rules. Therefore the most effective protection is a fully compliant supply chain. We recommend using a Preferred Supplier List of trusted providers.”

With only two months left to prepare, it’s vital that recruiters act now to protect themselves. If you have any questions about how to prepare, need help creating a preferred supplier list or if Orange Genie can help in any way please contact us on 01296 468483 or email


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