• Forgot your password?
  • Forgot your username?
  • Criminal Finance act

    The Criminal Finance Act (CFA) gained Royal Assent on 27th April 2017 and came into force on 30th September 2017. CFA gives law enforcement agencies and partners, the capability and power to recover the proceeds of crime, tackle money laundering, tackle tax evasion and corruption and combat the financing of terrorism.

    CFA makes all partnerships or limited companies ‘criminally liable’ if they do not prevent their employees, clients, etc. within their supply chain from carrying out tax evasion.

    Introduction

    Please read this policy which provides essential information about policies relating to data protection principles with which Microsystems International must comply.

    This CFA has improved the UK government’s ability to tackle tax evasion, money laundering and financing terrorist acts and to recover the proceeds of crime. This Act introduced two new corporate offences which makes it easier for companies and partnerships to be held criminally liable for the actions of their staff and associated persons around the world.

    The real aim, however, is to encourage companies to take precautions that are adequate to stop employees from encouraging tax evasion in the UK and overseas. Companies should not aid the evasion of tax by the taxpayer.

    HMRC have issued guidance to help businesses understand the process and procedures they might put in place to prevent employees from evading tax. HMRC stresses that the guidance is intended to be of general application and applied proportionately. HMRC’s guidance mirrors the guiding principles in the Bribery Act 2010 and focuses on Risk Assessment, Proportionality, Top-level commitment, Due diligence, Communication, and Monitoring and Review.

    Part 3 of the Criminal Finance Act

    Part 3 of the Act sets out the corporate offences for failure to prevent the criminal facilitation of criminal tax evasion. Evasion is a crime; tax avoidance is not. Under the Act, relevant bodies will be liable for failing to prevent the actions of their employees, who criminally facilitate tax evasion for their employees, clients and other people associated with the company.

    Money Laundering: Sharing of Information within the Regulated Sector (Sections 3392B – 3392G)

    • This guidance is issued to set out the principles for sharing information within the regulated sectors and between the regulated sector and an authorized officer of the National Criminal Agency (NCA) (via the UK Financial Intelligence Unit (UKFIU).
    • The CFA has introduced new sections 3392B – 3392G into the Proceeds of Crime Act 2002 (“PoCA”) and new sections 21CA to 21CF into the Terrorism Act 2000. These new provisions will allow banks and other businesses in the regulated sector to share information with each other on a voluntary basis in relation to a suspicion that a person is engaged in money laundering, suspicion that a person is involved in the commission of a terrorist financing offence or in relation to the identification of terrorist property or the movement or use.
    Please note that the regulated sector can refuse to share such information since it is voluntary but on the good side, filling required Suspicious Activity Reports (SARs) is not voluntary and could be used.

    If the request for voluntary information is refused, then it is appropriate to use and submit a SAR report in respect of the relevant matters.

    • Information provided by a UK enforcement agency may not be shared without the prior consent of the agency concerned.
    • The CFA has also introduced new conditions for processing personal and sensitive personal data for schedules 2 and 3 to the DPA, where disclosures to other regulated sectors are made in good faith.

    Those using these provisions will still need to take appropriate steps to ensure that any disclosures made when sharing such information comply with the Data Protection Act 1998 and the General Data Protection Regulation (GDPR) which came into force in May 2018.

    Over the years, some dubious recruitment agencies have created ways to avoid their clients paying tax. Such questionable acts include acts like loan schemes etc. A lot has been done to eradicate such dubious schemes. If any of your consultants are involved in such schemes, you will be held liable.

    The only way to avoid liability in such schemes is to show that you have implemented prevention procedures that are genuine and realistic.

    To Prevent Yourself from Liability

    Avoid making false statements (whether written or verbal) relating to income tax or other personal taxes. Do not deliver false documents relating to income tax. Do not fail to disclose income. Do not fail to properly account for PAYE and National Insurance. Do not fail to register for VAT and do not fail to account for VAT.