Bounce Back Loans: – not many high streets banks are offering this now, if you have not already taken the maximum BBL and are wanting to access the scheme I would recommend Starling bank as they are still accepting applications whether you have an account with them or not- however their waiting list prioritises starling customers so opening a business account is best option. I currently bank with Starling and have found them exceptionally helpful.
Local authority grants: – Each council is different but they have all been changing their application rounds and criterial throughout the year – so it is worthwhile refreshing whether it’s an option for you. It may also be possible to submit a claim for each council area operated in rather than just the one where you live. I’m aware of at least two variations of these – the local Restrictions Support Grant and the Additional Restrictions Grant.
Discretionary grants – On 5th January 2021 Rishi Sunak announced £4.6 billion in new lockdown grants to support businesses and protect jobs. Whether this is additional funding for existing schemes or newly defined grant support we will have to wait and see.
For those of you who have had no Government support at all, there is an active facebook group called ExlcudedUK which have been lobbying Government, posting petitions, and been in the media recently.
The UK Government believes that businesses should be criminally liable where they fail to prevent those who act for them, or act on their behalf, from criminally facilitating the evasion of tax.
The Criminal Finances Act 2017 came into force on 30 September 2017 and introduced Part 3 Corporate Offences of failure to prevent facilitation of tax evasion (“FoTE”) which applied from that date to all companies and partnerships (wherever incorporated or formed), making them criminally liable and subject to an unlimited fine where they fail to have a system of procedures in place to prevent the facilitation by others of tax evasion.
The only defence against a criminal conviction is if the company or partnership (not just LLPs) can evidence and demonstrate that it had put in place reasonable procedures to prevent the facilitation of tax evasion by others.
For wide reaching legislation it is perhaps surprising that most businesses have their heads in the sand when it comes to the Criminal Finances Act 2017 (“CFA 2017”) and the facilitation of tax evasion offence (“FoTE”), particularly when it came into force in September 2017.
Having helped clients through this process I can appreciate that probably the majority of businesses fall into the category of not knowing what to do in order to mitigate their risk.
Practical Examples
A sales person agrees to alter the description of goods on an invoice to enable the customer to obtain a more favorable tax treatment
An online trading platform continues to enable persons to trade with the knowledge that they should have registered to pay VAT or import duty
Someone in payroll under declares the travel plans of a mobile executive to reduce the level of income tax paid
Someone in the distribution department colludes with a customer to misrepresent the true nature of goods in order to reduce the amount of import duty paid
Following a risk assessment, it may be reasonable for a medium risk business to:
internally audit systems and controls to identify current processes and possible tax evasion facilitation risks
update staff handbooks and employment contracts to include the intolerance of the facilitation of tax evasion by the business
amend customer and supplier agreements to include a statement that there is an expectation that all stakeholders of the business adopt a similar stance on the facilitation of tax evasion
demonstrate a commitment to prevention of tax evasion facilitation by issuing a prominent anti-facilitation of tax evasion message or policy from the board of directors against all forms of tax evasion
provide regular training for staff on financial crime detection and prevention
have terms in contracts (with employees and contractors) requiring them not to engage in facilitating tax evasion and to report any concerns immediately
communicate clear and defined whistleblowing procedures and protection
periodically review these preventative procedures
Every organisation is different in terms of nature, size, and complexity of the business it does. Proportionality underpins the defence against the facilitation of tax evasion offence, with large multinational and domestic SME’s having a significantly different risk profiles and therefore having different approaches to preventative procedures.
If more businesses start addressing and taking the Criminal Finances Act 2017 seriously the lack of its awareness should hopefully become as much of a myth as ostriches burying their heads in the sand.
What businesses need to do however, is to look internally at themselves and assess their risk, now.
