Criminal Finances Act Compliance Pack

The Criminal Finances Act 2017 (CFA) came into force on 30 September 2017. On the introduction of this act every employer in the country now has an obligation to actively discourage their employees assisting customers evade tax. This affects all businesses (not sole traders) that have at least one employee. The penalty for non-compliance? 12 months in prison or an unlimited fine.

In order to help you meet your obligations Menzies have developed the CFA Compliance pack.

The CFA Compliance pack is designed for lower risk clients where it should meet all your needs but even if you have 500+ employees, you’re a multi-national group or are in a high risk industry (e.g. accountancy, legal or financial service) you can still benefit from the contents of the CFA Compliance pack but may need additional advice to completely fulfil your obligations.

Menzies Criminal Finances Act Compliance Pack

  • A risk assessment questionnaire which identifies areas where your business may need to implement further controls above and beyond the pack contents.
  • An action plan summary which will include deadlines to implement any changes required
  • A board minute acknowledging the senior management’s commitment to a zero-tolerance approach to tax evasion
  • A Tax Evasion prevention policy for inclusion in the staff handbook/employment contract/contractors terms of business
  • A disclosure to include on your website publicly professing your commitment to fulfilling your obligations under this legislation
  • A brief email to the business’ employees explaining what this is all about
  • And finally, a 15 minute training video for every member of the firm to watch.

CFA compliance is an ongoing process, but this should get you started. For more information about the CFA Compliance pack or to obtain a fee quote for your copy, please contact a member of the Menzies team or email

More about The Criminal Finances Act

The Criminal Finances Act introduces the new crime of “Failing to Prevent the facilitation of Tax Evasion”. Businesses need to be aware what this means for them and their senior management.

The new law

The Criminal Finances Act 2017 received Royal Assent on 27 April 2017. Part 3 of the Act which relates to the new offence came into force on 30 September 2017. The new law applies to all companies and partnerships but not sole traders.

The three stages to the new offence

1 – Firstly, there must be a criminal offence committed by a customer of your business. If there is no offence by your customer then the business’ senior management cannot be penalised. Whether a conviction against the customer is secured or not is irrelevant as the taxpayer may make a full disclosure or HMRC may decide not to prosecute. The offence was still committed even if the individual is not prosecuted.

2 – As a second stage the tax evasion must have been facilitated by someone representing the business. This could be an employee, but also an agent or consultant who represents your firm.

3 – The senior management of the business failed to put in place reasonable prevention procedures.

The defence

The crime is being treated as what’s known as a “strict liability” offence. This means that if the first two stages have occurred as outlined above, then the corporate crime of failing to prevent the facilitation of Tax Evasion will automatically assume to have been committed. It is up to the senior management of the business to put a defence across to disprove the allegation. The defence prescribed in law is to have “reasonable prevention procedures” in place.

In order to determine what are “reasonable” procedures it is first necessary to undertake a risk assessment. Based on the level of risk discovered the appropriate procedures can then be planned.

Contact Menzies Business Tax team

To speak to a partner or for more information about the tax services we offer please contact one of the Menzies LLP offices or complete our contact from below.