Corporate failure to prevent tax evasion
There are a range of statutory offences of "fraudulently evading" taxes. Beyond these statutory offences of fraudulent evasion, there is a common law offence of cheating the public revenue, committed by a person who engages in any fraudulent conduct that tends to divert funds from the public revenue.
	It is also a crime to facilitate deliberately another person’s tax evasion. The above offences are committed where a person is knowingly concerned in, or takes steps with a view to, the fraudulent evasion of a tax owed by another. Moreover, like any offence, it is a crime to aid and abet another person to commit a tax evasion offence. As such where a banker, accountant, or any other person, deliberately facilitates a client to commit a tax evasion offence, the banker or accountant commits a crime.
	Previously, where a banker or accountant criminally facilitated a customer to commit a tax evasion offence, the taxpayer and the banker or accountant committed a criminal offence but the company employing the banker or accountant did not. Even in cases where the company tacitly encouraged its staff to maximise the company’s profits by assisting customers to evade tax, the company remained safely beyond the reach of the criminal law.
	The offences in Part 3 hold these organisations and corporations to account for the actions of their employees. This power gives effect to the former Prime Minister’s commitment to legislate following the International Consortium of Investigative Journalist’s (ICIJ) publication of what are known as the "Panama Papers". Rather than focusing on attributing the criminal act to the company, the offences focus on – and criminalise – the company’s failure to prevent those who act for or on its behalf from criminally facilitating tax evasion when acting in that capacity.
	Therefore, where a person acting for or on behalf of a relevant body, acting in that capacity, criminally facilitates a tax evasion offence by another person, the relevant body would be guilty of the corporate failure to prevent the facilitation of tax evasion offence, unless the relevant body can show that it had in place reasonable prevention procedures (or that it was not reasonable to expect such procedures).
	The new corporate offences cannot be committed by individuals; they can only be committed by "relevant bodies", that is, legal persons (companies and partnerships). Moreover, they are only committed in circumstances where a person acting for or on behalf of that body, acting in that capacity, criminally facilitates a tax evasion offence committed by another person. Thus where the taxpayer commits a tax evasion offence contrary to the existing criminal law, and a person acting for or on behalf of the relevant body also commits a tax evasion facilitation offence contrary to the existing law by criminally facilitating the taxpayer’s crime, the relevant body commits the new offence. However, absent an existing offence at the taxpayer and associated person level, the new offences cannot be committed. Where a company’s staff member commits a tax fraud in relation to another’s tax without facilitating another, the offence is not committed. It is an offence to unreasonably fail to prevent the criminal facilitation of tax evasion, not tax evasion itself.
	The new offences do not make companies responsible for the crimes of their customers (unless those who act for or on behalf of the company criminally facilitate such crimes). Nor are the new offences committed:
Where the taxpayer engages in aggressive avoidance falling short of fraudulent evasion or is otherwise non-compliant.
Where the person acting for or on behalf of the relevant body inadvertently or negligently facilitates the taxpayer’s fraudulent evasion of tax.
Where the taxpayer’s fraudulent evasion is facilitated by a person who is not acting for or on behalf of the relevant body at the time of doing the facilitating act (for example if an employee, in their private life, criminally facilitates his or her partner’s fraudulent evasion of their tax; or where a sub-contractor criminally facilitates tax fraud when working for an entirely different contractor during work unconnected to the relevant body). The new offences are only about ensuring that relevant bodies have reasonable procedures to prevent those acting for or on their behalf from criminally facilitating the fraudulent evasion of tax, when acting in that capacity.
Every time somebody acting for or on behalf of the relevant body criminally facilitates another’s tax crime (only reasonable procedures, not fail proof procedures, are required: a risk based, rather than zero tolerance, approach is adopted).
Where tax evasion offences are currently being committed by those acting for or on behalf of a company, the new offences require nothing more than for that company to have reasonable procedures in place to prevent such offences being committed by those acting for or on its behalf.