Recruitment agencies and the Criminal Finances Act: Are you still at risk?

recruitment agencies criminal finances act

23rd April 2018

As regular readers of our blog will know, we’ve been increasingly concerned by the number of recruitment agencies still exposing themselves to risk as a result of the Criminal Finances Act 2017 (CFA). In fact, in our joint survey with Camino Partners, we discovered that almost half (43%) of firms are currently unaware of the potential impact the CFA could have on their business.

And with the latest phase of the act being rolled out last week, the risks are now arguably greater than ever before.

Criminal Finances Act: Phase Two

As of Monday 16th April, HMRC has been granted additional powers in order to identify and prosecute fraudulent behaviour. This includes the ability to seize property in relation to cases of fraud. Officers now have increased authority surrounding the search for, and seizure of, cash – including gaming vouchers, fixed-value casino tokens and betting receipts. Officials have also been granted the ability to force forfeiture of cash without first obtaining a court order.

Recruitment agencies must take note

HMRC has sent a clear message with the introduction of the CFA: fraudulent behaviour, including tax evasion by your contractors overseas will not be tolerated. This latest phase in the roll out of this legislation provides officers with greater powers to investigate possible illegal activity. More importantly, it leaves wrong-doers with fewer places to hide. With the addition of greater abilities to search for and detain cash, contractors and recruiters who have attempted to go ‘offline’ in order to save on tax payments will soon find themselves facing the wrath of HMRC.

And as the authority continues to clampdown on tax fraud, recruiters can no longer simply remain unaware of the risks to their firm. A lack of knowledge of legal requirements or wrongful activity connected to your business will not be considered a defence, so it’s critical that agencies take the bull by the horns and ensure their firm and contractors are compliant.

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