Anti Facilitation of Tax Evasion Policy

1. Introduction

Tax evasion is a significant issue in global trade, undermining societies by diverting essential resources, thereby hindering economic and social development. It directly impacts our UK organisation if criminally facilitated within our operations. We are committed to running our businesses with integrity, honesty, and ethics, and we must all work together to prevent any involvement in tax evasion. Supported by the Board, this policy outlines the necessary steps to prevent tax evasion facilitation and ensure compliance with relevant laws.

2. What is tax evasion and how does this affect us?

Tax evasion is the illegal non-payment or under-payment of taxes. It is usually perpetrated by falsely declaring or not declaring taxes due to the relevant tax authority. Tax evasion is a criminal offence. It can be committed by an individual, e.g. in relation to income tax or VAT, or a legal entity, e.g. in relation to corporation tax.

Circumstances in which tax evasion may occur in relation to our business include:
a. structuring a transaction on behalf of a client in such a way as to evade tax;
b. a supplier asks us to pay them cash in hand or via some complex payment mechanism that allows them to evade tax; or
c. a client asks us to treat personal expenses as a corporate expense in the accounts.

The Criminal Finances Act 2017 (CFA 2017) came into force on 30 September 2017. It introduces a corporate offence of failure to prevent the criminal facilitation of tax evasion.

The offence has three ingredients, all of which must exist for criminal liability to arise:
a. criminal tax evasion by a taxpayer, e.g. by a client or supplier of The CFO Centre;
b. criminal facilitation of that tax evasion by The CFO Centre’s employee, agent, principal or any other person performing services for or on our behalf; and
c. failure by The CFO Centre to prevent our employee, agent, principal etc. from committing the criminal facilitation.

This corporate offence can be committed regardless of whether the tax evaded is owed in the UK or in a foreign country and can occur in both the public and private sectors.

There is only one relevant defence to the corporate offence of failure to prevent the criminal facilitation of tax evasion: when the tax evasion facilitation offence was committed, The CFO Centre had reasonable prevention procedures in place.

3. The CFO Centre’s approach

We take a zero-tolerance approach to tax evasion facilitation by our people and our third party representatives. We are committed to:
a. rejecting the facilitation of tax evasion; and
b. not recommending the services of others who do not have reasonable prevention procedures in place.

4. Who can be involved in tax evasion facilitation and in what circumstances?

Tax evasion may be facilitated by our:
a. staff (employees, directors etc.) or anyone they authorise to do things on our behalf; and/or
b. principals, agents, intermediaries, representatives and any other person who performs services for The CFO Centre or on our behalf.

These are known as ‘associated persons’ and for criminal facilitation to occur, the associated person must:
a. deliberately and dishonestly take action to facilitate the taxpayer-level evasion; and
b. do so in their capacity as an associated person of The CFO Centre.

5. Common Red Flags

Common indicators of tax evasion facilitation (i.e. red flags) include those listed below. There may well be others:
a. request for payment by cash;
b. overly-complex payment mechanisms;
c. services/good provided to jurisdictions that do not subscribe to Common Reporting Standards;
d. services/good provided to jurisdictions that have a low OECD tax transparency rating;
e. transactions involving overly complex supply chains;
f. transactions involving private banking facilities; and/or
g. records are incomplete or missing.

6. Risk Assessment

We aim to ensure our tax evasion facilitation procedures are proportionate to the risks we face.

We have performed an assessment of the risk of our organisation being exposed to tax evasion facilitation. This Tax evasion facilitation prevention policy has been developed in response to the results of that risk assessment. Where necessary, we will review our risk assessment and make appropriate changes to this policy.

We have identified certain aspects of our business that present a higher risk than others of involvement in tax evasion facilitation. These include:
a. Accounts preparation and tax services provided by our Principals to our clients; and
b. Transactions giving rise to contingent or part-contingent or success-driven fees (e.g. in relation to business sales and fundraising).

7. Records

It is essential that we keep full and accurate records of all our financial dealing. False or misleading records could be very damaging to us.

8. Overall responsibility for this policy

The Board has overall responsibility for this policy. The Board is responsible for ensuring this policy is adhered to by all staff and Principals.

9. Your responsibilities

Everyone in the organisation is responsible for:
a. reading and being aware of the contents of this policy;
b. complying with this policy and any related policies; and
c. reporting cases where you know, or have a reasonable suspicion, that tax evasion facilitation has occurred or is likely to occur.

10. What to do if you think something is wrong

Each of us has a responsibility to speak out if we discover anything corrupt or otherwise improper occurring in relation to our business. We cannot maintain our integrity unless we do this.

If you discover or suspect that tax evasion has been facilitated or may be facilitated, you must follow our Speak Up (Whistleblowing) process or submit a suspicious transaction report whether by:
a. another staff member;
b. another Principal or Regional Director or Regional Partner
c. a third party who represents us;
d. one of our suppliers or competitors; or
e. anyone else—perhaps even a client.

11. Training

All Principals will receive training on this and related policies. New Principals will receive training as part of the induction process. Further training will be provided at least every two years or whenever there is a substantial change in the law or our policy and procedure.

12. Consequences of failing to comply

Failure to comply with this policy puts both you and the business at risk. Non-compliance may result in committing a criminal offence, as the criminal law relating to tax evasion carries severe penalties. Due to the policy’s importance, any failure to adhere to its requirements may lead to disciplinary action under our procedures, potentially resulting in dismissal for gross misconduct. Non-employees who breach this policy are subject to immediate contract termination. If you have any questions or concerns about this policy, please contact the Chief Financial Officer or the Group Risk Advisor without hesitation.

13. Useful Contacts

Nevil Durrant – Group CFO – ([email protected])

Paul Dodd – Group Risk Advisor – ([email protected])

Toby Parkes – Group Head of Legal and Compliance – ([email protected])

Zoe Wilson – Compliance Officer – ([email protected])