Contractors' Questions: What's a new corporate tax evasion offence about?
Contractor’s Question: I’m one of the agencies who could apparently be accused of tax evasion if we put our IT contractors in touch with dubious tax schemes, as mentioned in this ContractorUK article. Is there any more you can tell me?
Expert’s Answer: A new offence of Failing to Prevent the Facilitation of Tax Evasion comes into force on Saturday September 30th, 2017. You will need to have “reasonable preventative measures” in place, so time is very much of the essence.
Our recommendation is to implement a PSL of vetted suppliers, so you can ensure all the suppliers you use have a strong compliance record. That obviously means disengaging from any non-compliant suppliers.
And as you identify, it also means ensuring your contractors have compliant alternatives in place. This may involve educating contractors who may not be aware of anything untoward in their current arrangements, which could be tricky.
The reason you must take these actions is that the government wants to put it beyond doubt that any company (or partnership) actively or passively enabling tax evasion (including ‘turning a blind eye’), will be prosecuted.
As to what you can do in your business ahead of the September 30th commencement, the government has published (draft) guidance. Divided into six-parts, the guidance explains not only the policy behind the new offences, but it also lists the processes and procedures that can be put in place to prevent "associated persons" of your business from criminally facilitating tax evasion. I recommend that you read it!
The expert was Helen Christopher, operations manager at contractor accountancy firm Orange Genie.