HMRC has published statistics
showing it had 10 live corporate criminal offences investigations as at 31
July 2020 with a further 22 ‘live opportunities’ under review. The new
corporate criminal offences (CCO) came into effect on 30 September 2017 and
target organisations which fail to prevent the facilitation of tax evasion.
Commenting on the figures, James Egert, tax partner at BDO,
noted: ‘we are seeing consideration of CCO risk being “business as usual”. To
highlight this, in the M&A world, we are seeing CCO clauses included in
deal documentation and forming part of transaction due diligence. However, for
the first time in our experience, we have witnessed a purchaser threatening to
pull out of a deal at the eleventh hour purely because the target company was
unable to evidence that any steps had been taken towards compliance with the
CCO legislation’.
‘This is further evidence of the need for businesses to clearly
demonstrate CCO compliance ... As a result of Covid-19, there have been
widespread staff reductions and unprecedented numbers of employees working
remotely, potentially leading to an increased burden on remaining staff and a
lower level of oversight of their activities. With senior management focused on
business critical functions, outdated processes which have not been reviewed to
take into account the changes in working practice will give rise to a
heightened risk of compliance failures.’
HMRC has published statistics
showing it had 10 live corporate criminal offences investigations as at 31
July 2020 with a further 22 ‘live opportunities’ under review. The new
corporate criminal offences (CCO) came into effect on 30 September 2017 and
target organisations which fail to prevent the facilitation of tax evasion.
Commenting on the figures, James Egert, tax partner at BDO,
noted: ‘we are seeing consideration of CCO risk being “business as usual”. To
highlight this, in the M&A world, we are seeing CCO clauses included in
deal documentation and forming part of transaction due diligence. However, for
the first time in our experience, we have witnessed a purchaser threatening to
pull out of a deal at the eleventh hour purely because the target company was
unable to evidence that any steps had been taken towards compliance with the
CCO legislation’.
‘This is further evidence of the need for businesses to clearly
demonstrate CCO compliance ... As a result of Covid-19, there have been
widespread staff reductions and unprecedented numbers of employees working
remotely, potentially leading to an increased burden on remaining staff and a
lower level of oversight of their activities. With senior management focused on
business critical functions, outdated processes which have not been reviewed to
take into account the changes in working practice will give rise to a
heightened risk of compliance failures.’
