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Failure To Prevent Tax Evasion: The Offence Every Firm Overlooks

ended 22. July 2026

Almost nine years after it came into force, one of the most far-reaching offences on the statute book has produced just one charging decision and no convictions. On paper that looks dormant. In law it is anything but. The corporate offence of failing to prevent the facilitation of tax evasion is close to strict liability, and it applies to almost every company and partnership in the country, accountancy firms included.

The offence sits in Part 3 of the Criminal Finances Act 2017 and came into force on 30 September 2017. It has two limbs: failing to prevent the facilitation of UK tax evasion under section 45, and of foreign tax evasion under section 46. New HMRC figures released on 21 July 2026 show that, as at 30 June 2026, there were 13 live investigations, a further 27 opportunities under review and 136 already reviewed and rejected. HMRC has secured one charging decision, under section 45, and no convictions. The cases named span software providers, waste services, accountancy and legal services, transport and hospitality.

Here is the part the headline figures bury. The offence does not punish a business for evading its own tax. It punishes the business when a person associated with it, an employee, an agent or anyone performing services for it, criminally helps another party evade theirs. The only defence is having reasonable prevention procedures in place, or showing it was unreasonable to expect them, and conviction brings an unlimited fine and a criminal record for the organisation. So a near-empty conviction column is not an all-clear, and the same failure-to-prevent model is now spreading to the new corporate offence of failing to prevent fraud. The people most exposed are not the big banks everyone imagines, but the small-business owner or partner who has never documented a single prevention procedure and assumes this is only a problem for the City.

  1. Almost nine years in, this offence has one charging decision and no convictions. Is that a sign it is not working, or proof that most businesses have simply never been looked at?
  2. The only defence is having reasonable prevention procedures in place. Is it fair to make a company criminally liable for what an employee or contractor does to help a third party evade tax, and who is hit hardest by that?
  3. What should ordinary small firms and partnerships, accountancy practices included, actually do to protect themselves before enforcement catches up? Do you have a client who has never documented any prevention procedures and assumes this is only for big banks? If so, please give as much colour and detail as possible.

2 responses from the Newspage community

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Editor
Harvey Dhillon
Founder & CEO at Zmartly
Nine years on, this offence has 13 live investigations, one charging decision and no convictions. That looks like a dead letter. It is the opposite: almost no one has been checked yet, and it covers every UK company and partnership, accountants included. You are judged on the steps you wrote down to stop tax evasion, not on the tax you paid. It does not punish your own tax at all. It bites when someone acting for you, an employee or a contractor, deliberately and dishonestly helps a third party evade theirs. An honest mistake does not count. The rule is fair; where it lands is not, because a bank has a compliance team and a two-partner firm has nobody. So spend an hour this week and write one page: who could be asked to help someone evade tax, what you tell staff and contractors, and today's date. Enforcement here is early, not absent, and the firm it reaches first will be the one with nothing written down.
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Editor
Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
No convictions in nine years? Don't relax yet. That empty column isn't good news. It's a warning shot. Here's the catch. If anyone who works for you, staff, a contractor, an agent, helps someone else dodge tax, your business gets the blame. Not them. You. That means an unlimited fine and a criminal record for the firm. And the same rule is now coming in for fraud too. Most people think this is a City banks problem. It isn't. The ones at real risk are small firms and accountants who have never written down how they stop this happening. They just assumed it wasn't about them. Now the good news. You get off the hook if you have simple, sensible checks in place. Any small business can do this. Write down your rules. Train your staff. Keep a record. Don't wait to be the first firm made an example of. A basic policy costs you an afternoon. Getting caught without one could cost you everything.