The Corporate Criminal Offence – Where are we now?

It is over four years since the Corporate Criminal Offence (“CCO”) was introduced to tackle the failure to prevent the facilitation of tax evasion. Although a lot of businesses may have undertaken an initial risk assessment, HMRC is likely to have a renewed interest in this area following the pandemic. Now is a good time to reflect on your business’ compliance with CCO and the strength of  prevention procedures in place.

These rules must be considered by every organisation doing business in, with, or through the UK. There are no exceptions; the CCO applies irrespective of the size, industry or perceived risk related to a business.

HMRC have many live CCO investigations and further opportunities under review, spanning a range of business sectors. This demonstrates that HMRC is continuing to actively enforce the CCO legislation. Now is a good time to reflect and review the appropriateness of your business’ CCO prevention procedures and ensure that the recommendations made during the initial risk assessment have been properly implemented.

Any changes to the business represent a potential CCO risk and indicate that reassessment may be required.

Management is also required to keep staff updated on the relevant procedures and ensure they are being followed. CCO refresher training is a perfect opportunity to remind staff of the rules, together with their roles and responsibilities.

Should your business be considering a refresh of its CCO risk assessment?

Businesses are expected to regularly review the risks they face and update their policies to mitigate these risks. Key considerations include:

• Have your business’ working practices changed as a result of the COVID-19 pandemic? Have new working practices been adopted, such as flexible working?
•  Has the business changed since the last CCO risk assessment, for example has there been:
  - Expansion into a new territory or market
  - A new subsidiary
  - A new significant supplier
  - A recruitment drive
• Have management kept staff updated on changes to relevant procedures?
• Has CCO refresher training been undertaken by key/new members of staff?
• Has your CCO risk assessment been reviewed, and any recommendations to controls and processes properly implemented?

How S&W can help – CCO Refresh

Risk assessments should be regularly reviewed, particularly following the impact of COVID-19 where working practices and potentially business activities have changed. Many businesses have been forced to change suppliers or have pivoted their business models and are now operating in  new markets.

For businesses that have already performed a risk assessment, we can support with carrying out a CCO refresh, which normally involves refreshing your current risk assessment to reflect any changes in the business and reviewing your existing policies and procedures to identify required changes.

We also support with CCO refresher training for key employees - we have developed a bespoke e-learning course and also offer face-to-face training sessions.  

Please contact Clare Halligan or Janaissa Eaglestone to discuss how Smith and Williamson can assist you.

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DISCLAIMER
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. Clients should always seek appropriate tax advice before making decisions. HMRC Tax Year 2022/23.