Corporate Criminal Offence

By Stephen Mathews | 24 March 2020

 

2017 saw the introduction of a new Corporate Criminal Offence of “failure to prevent the criminal facilitation of tax evasion”. It is intended to prevent executives who help others to evade tax hiding behind company protection.

It applies to all 'corporates' including incorporated churches, which means those structured as Charitable Incorporated Organisations as well as companies. The offence puts the church and its trustees at risk in the event that the offence is proved.

To be proved, three elements must be present:

 

  • Criminal tax evasion (UK or foreign tax) must take place;
  • An associate person (employee, volunteer, contractor or agent) of the church must deliberately and dishonestly facilitate that evasion;
  • The church must have failed to prevent the facilitation and so only needs the trustees not to have done enough to prevent it.

 

Does it all seem a bit far-fetched to ever happen in your church?

Take a moment to think about these situations, which we have seen or heard about in churches, and remember the person facilitating the evasion only has to be an associate to the church, not necessarily an employee.

 

  • Making cash payments to a supplier to avoid VAT
  • Making cash payments to an employee to allow them to avoid tax or claim benefits
  • Processing Gift Aid claims on gifts where it is known that the money for the donations has come from other people and not solely the person making the donation (e.g. sponsorship)
  • Pretending a payment for benefits provided is a donation (e.g. Providing a donation receipt to enable a corporate donor to claim tax relief when it isn’t a donation)

 

The Charity Tax Group has written some helpful guidance for churches and small charities explaining situations where the offence might occur and suggesting actions for trustees to consider to best protect their church or charity.


Read more...

Corporate Criminal Offence Guidance for Small Charities

 

Posted by Stephen Mathews
 
Stephen is a Senior Consultant at Stewardship and has spent over 25 years in the accountancy profession. Stephen is a trustee for a number of small Christian charities and has been involved in various church leadership roles for over 20 years.

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