10 Dec 2018
Scotland’s businesses are putting themselves at risk of financial ruin by ignoring a law designed to tackle tax evasion, according to a leading business advisor.
Grant Thornton is warning that many companies have yet to implement a strategy for complying with the Criminal Finances Act, which was enacted on 30 September 2017.
The Act means firms are now strictly liable in criminal law for any facilitation of tax evasion offence committed by a person representing or associated with the company. Penalties include an unlimited fine or other severe actions such as confiscation orders.
But, despite the tough approach from HMRC, Grant Thornton says confusion over the scope of the CFA could be leading many firms to overlook the risk of falling foul of the law.
Vishal Chopra, Head of Tax in Scotland at Grant Thornton, said:
“Over the last year, the HMRC has taken a relatively light-touch approach to the CFA, allowing companies to get to grips with the sweeping changes. But, as we enter 2019, we’re witnessing authorities now adopting a more aggressive, proactive attitude. It’s important to remember that the law change focuses not just on those carrying out a criminal act, but also businesses that haven’t clearly demonstrated that they had measures in place to prevent any tax evasion. That small detail could be crucial and it’s imperative that all companies – regardless of their size – explore risk assessments and detailed plans to be absolutely clear that they have the right procedures in place.”
To assist companies with their risk planning processes, Grant Thornton has launched a series of workshops and bespoke sessions for company leaders, offering interactive discussion, risk mapping and action planning.
The business advisor is urging all firms to take action today and ensure that they understand the CFA and its implications for their own operations.
Pictured: Vishal Chopra, Head of Tax, Scotland, Grant Thornton UK