Failure to Prevent the Facilitation of Tax Evasion – A Live Enforcement Signal

Failure to Prevent the Facilitation of Tax Evasion – Live Enforcement Begins

After eight years of inactivity, HMRC has initiated its first corporate prosecution under the Criminal Finances Act 2017 (CFA). The case, brought against Bennett Verby Ltd, a Stockport-based accountancy firm, relates to alleged facilitation of tax evasion linked to R&D tax credit fraud.

• First hearing: August 2025
• Provisional trial date: 27 September 2027
• Offence: Failure to Prevent the Facilitation of Tax Evasion
• Penalty: Unlimited fine on conviction

This development is a landmark enforcement signal. It confirms that the “failure to prevent” corporate offences model – established through the UK Bribery Act and expanded under the Economic Crime and Corporate Transparency Act with respect to Fraud – is now being actively deployed in the criminal tax evasion space.

From Hypothetical Risk to Active Exposure

For CFOs, General Counsel, and Compliance Officers, this marks a shift in HMRC’s appetite to prosecute under the CFA. The offence is strict liability in nature, unless the corporate defendant can demonstrate that it had reasonable prevention procedures in place at the time of the facilitation. Crucially, there is no need to prove senior leadership knowledge or intent.

Practical Implications

• HMRC is now actively investigating and prosecuting the CFA offence.
• Organisations must assess risk exposure from “Associated Persons” – including tax advisers, consultants, contractors, joint-venture partners and international agents.
• A documented, risk-based framework is essential to mount a defence.
• Compliance should align with the Six Guiding Principles from HMRC’s official guidance:

1. 1. Top Level Commitment
   2. Risk assessment
   3. Proportionate risk-based procedures
   4. Due diligence
   5. Communication & training, and
   6. Ongoing monitoring

Spencer West’s legal and tax specialists advise clients on:

• Corporate criminal exposure
• International tax compliance
• Bribery, fraud, and facilitation of tax evasion offences
• Governance and board-level risk mitigation

We offer:

• A one-hour strategy session for GCs and Compliance Officers
• Risk mapping against current prevention procedures
• Practical design support for proportionate, defensible compliance framework

Please see our Failure to Prevent Facilitation of Tax Evasion Brochure here.