24th May 2017
Many of you will have seen news last month on the introduction of the UK Criminal Finances Bill which received Royal Assent on 28th April. But what does the bill outline and what does it mean for recruitment agencies?
Upping the ante
Essentially, the bill is another weapon adopted by the government to lead the fight against tax evasion. It means that if employees of a firm facilitate evasion then the firm could receive;
- An unlimited fine
- A criminal conviction
Which doesn’t sound like a particularly attractive proposition for many agencies.
Overseas and the UK
James Siswick, partner, risk consulting at KPMG UK also warned of potential reputational damage.
“From September all financial institutions will on the hook for the conduct of their staff. This isn’t just a case of reassessing product offerings and having a firm word with the tax department, the Criminal Finances Bill will apply to all business activity, so could be triggered by erroneous treatment of employee expenses or missing VAT on a window cleaning bill.”
“Institutions now face the task of assessing where their risks lie and how to implement reasonable procedures to manage them. The challenge is not limited to the UK. Global institutions with a UK presence could be subject to UK criminal proceedings if an employee anywhere in the world is found guilty of facilitating tax evasion. The additional risk and compliance challenges this poses are significant and come at a time when Brexit is already causing uncertainty for some businesses.”
“Whilst few firms will be jumping for joy at the prospect of more compliance, the price of getting it wrong will help make the UK a leader in compliance and should also act as a driver for good corporate culture. Making the whole firm responsible for the actions of individuals will force firms to think very carefully about the type of people they employ and may also lead to a spike in whistleblowing.”
The UK has become much more adept at tackling tax evasion and with an environment where the seemingly innocent actions of your employees could land your entire firm in significant trouble, it’s clear that the solution is ensuring that you’re totally compliant with all tax-related legislation both here and internationally. If you’re unsure about your legal status, or simply want advice on how your agency can manage these changes then get in touch with the experts.