Part 3: Corporate offences of failure to prevent facilitation of tax evasion Failure of relevant bodies to prevent tax evasion facilitation offences by associated persons Section 45: Failure to prevent facilitation of UK tax evasion offences
Section 45(1) creates the offence of corporate failure to prevent the facilitation of tax evasion in relation to UK taxes. The offence is committed by a relevant body where a person acting in the capacity of a person associated with it commits a tax evasion facilitation offence, that is, criminally facilitates another’s offence of tax evasion.
	Tax evasion facilitation offence is defined in sub-section (5) as any offence under the law of any part of the UK committed by facilitating a UK tax evasion offence. It thus comprises being knowingly concerned in, or taking steps with a view to, the tax evasion of another, as well as aiding and abetting another person’s offence of tax evasion. However, the associated person does not commit a tax evasion facilitation offence when he or she inadvertently, or even negligently, facilitates another’s tax evasion. The facilitation by the associated person must be criminal under the existing law.
	Moreover, the associated person must commit the tax evasion facilitation offence in the capacity of a person associated with the relevant body. Where an employee criminally facilitates his or her partner’s tax evasion in the course of their private life and as a frolic of their own, they commit a tax evasion facilitation offence but not in the capacity of a person associated with their employer. Therefore the employing relevant body does not commit the new offence. Likewise a relevant body will not commit the new offence where it contracts with another relevant body that is evading its own tax.
	Tax evasion offence is defined in sub-section (4), as an offence amounting to a cheat of the public revenue or any offence consisting of being knowingly concerned in or taking steps with a view to the fraudulent evasion of tax. It thus comprises conduct currently capable of being indicted as a cheat of the public revenue, or as a statutory fraudulent evasion offence, such as those found in section 72 of the Value Added Tax Act 1994 or section 106A of the Taxes Management Act 1970. The new offence is only committed where such a UK tax evasion offence has been committed. Where the taxpayer is non-compliant or engaged in avoidance falling short of evasion the new offence will not be committed.
	Where a tax evasion offence has been committed and a person acting in the capacity of a person associated with the relevant body has committed a tax evasion facilitation offence, the relevant body will be guilty of the sub-section (1) offence, unless it can raise the defence in sub-section (2). This provides a defence where the relevant body has in force reasonable prevention procedures, that is, procedures designed to prevent persons associated with it from committing tax evasion facilitation offences (sub-section (3)). The defence is also available where it is not reasonable to expect the relevant body to have such procedures. It is only reasonable or proportionate procedures, as opposed to fool-proof or excessively burdensome procedures, that are required.
	Guidance will be published to assist relevant bodies to devise reasonable prevention procedures (see section 47).