THE CRIMINAL FINANCES ACT 2017 (CFA) AND HMRC’S NEW APPROACH TO ITS BUSINESS RISK REVIEW

On 5th June, Bird & Bird published an article saying that, in March 2019, HMRC published the results of a research study into the impact of the CFA offences.  These were, the article says, designed to drive a behavioural shift among businesses by placing a responsibility on them to take active steps to prevent the facilitation of tax evasion.  It is understood that the purpose of the study was to measure how successful the offences have been in achieving HMRC’s desired goal.  A random telephone survey of 1,002 businesses took place in August/September 2018.  The key findings of the study are reported, and the article says that HMRC notes that UK businesses appear to have a “relatively low” level of awareness of the CFA offences.  The article says that businesses should remember that it is their responsibility, not HMRC’s, to take active steps to prevent the facilitation of tax evasion – and the article elaborates on what “active steps” HMRC expects.  It also says that the firm expects HMRC’s activities to significantly increase in this area as it seeks to raise awareness and to engineer the hoped-for behavioural shift.  In addition, as part of the new approach to conducting business risk reviews, HMRC will be scrutinising what active steps have been taken by relevant bodies to prevent the facilitation of tax evasion.

The article goes on to say that HMRC has recently confirmed that it will be shortly signing off on its new Business Risk Review (BRR).  Businesses will become subject to a risk assessment by HMRC – with 4 levels of risk with a separate rating for each tax regime (i.e. VAT, Corporation tax, PAYE, etc) and 3 behavioural factors.  The article advises on what businesses should be doing – as a minimum, HMRC expect all businesses to have demonstrated top-level commitment; conducted an inherent risk assessment; and developed an implementation period plan.

https://www.twobirds.com/en/news/articles/2019/uk/the-criminal-finances-act-2017-and-hmrcs-new-approach-to-its-business-risk-review

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s