Financial penalty warning on new tax law

Businesses are at risk of being hit by penalties including unlimited fines by ignoring a new law aimed at tackling financial crime and tax evasion, a Scottish business adviser has warned.

The Criminal Finances Act, which came into force last year, makes companies liable for tax evasion offences committed by anyone representing or associated with them.

Although penalties include an unlimited fine or other severe actions such as confiscation orders, Grant Thornton’s Scottish head of tax, Vishal Chopra, said many firms had yet to put in place a strategy to make sure they don’t fall foul of the act.

Choprasaidhmrchadsofar taken a relatively light-touch approach to the law, allowing companies to get to grips with the sweeping changes. But he said there are signs a “more aggressive, proactive attitude” is being adopted.

“It’s important to remember that the law change focuses not just on those carrying out a criminal act, but also businesses that haven’t clearly demonstrated that they had measures in place to prevent any tax evasion,” said Chopra.

“That small detail could be crucial and it’s imperative that all companies – regardless of their size – explore risk assessments and detailed plans to be absolutely clear that they have the right procedures in place.”

Measures introduced by the UK government under the Act include “unexplained wealth orders” which can be used to force individuals suspected of financial crimes to set out how they acquired the money to buy particular properties or other assets. 0 ‘Signs of more aggressive approach’ – Vishal Chopra