Criminal Finance Act

The new law that recruitment agencies and freelance contractors must not ignore.


The new rules

From 30th September 2017, any company/partnership/LLP who fails to prevent the criminal facilitation of tax evasion can be penalised under the Criminal Finances Act 2017.

The introduction of this Act could result in recruitment agencies receiving criminal sanctions if they are found to be in breach of the new rules.

Simply, you could be liable if someone associated with your agency knowingly assists a contractor in evading tax in the UK or abroad. Or if you know that a contractor is evading tax in some way but failed to act.

Previously, attributing criminal liability required prosecutors to show that the senior members of the company/partnership/LLP were involved in and aware of the illegal activity. From 30th September, any employee of the agency who fails to prevent a criminal act is liable to prosecution.

What do you need to do?

In order to be compliant with this new Act, you must be able to show that your agency has introduced ‘reasonable procedures’ to help prevent the facilitation of tax evasion.

To do this you must be 100% aware of the risks associated with your contractors, employees, third parties and all of their activities.

You must be aware of the ‘reasonable procedures’ in place at all stages in the supply chain which prevent tax evasion.

You must ensure that all members of staff within your agency are aware of the legislation and the impact it will have on your agency.


What's our advice


We advise you to:

• Read the new legislation in full.

• Carry out a comprehensive risk assessment.

• Review your internal processes.

• Develop a culture at all levels of the agency where tax evasion is not acceptable.

• Provide staff training to ensure understanding of the legislation.

• Ensure all of your preferred providers can prove they are following the legislation.

Our commitment to our clients


We will:

• Ensure all products we provide are compliant with HMRC guidance.

• Provide ongoing compliance support to all of our clients when required.

• Notify our clients of any updates to relevant guidance.

• Assist with any staff training when necessary.

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