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Corporate Criminal Offence

Photo of Kevin Russell Kevin Russell
2 min

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)

In addition to the Government’s statutory guidance (which is comprehensive and should definitely be consulted), we have published two short Briefing Papers on our website:

The (tax) Corporate Criminal Offence: Implications for churches

The (tax) Corporate Criminal Offence: Implications for small, incorporated charities

Each of these gives a brief overview of the law, examples of possible offences (including using Gift Aid), and an example of the possible contents of a risk assessment and associated mitigation procedures.

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Written by

Kevin Russell

Kevin is a technical expert with over 25 years of experience of helping churches and Christian charities maximise their potential. His knowledge is sought not only by charitable organisations but by Government, the Charity Commission and HMRC.

Prior to working for Stewardship, Kevin had a wide range of business, charity and teaching experience and is a qualified chartered accountant, and a chartered tax advisor. 

Kevin and his wife Carol have 3 adult children and one grandchild.  They attend Grace Church, Highlands in North London. Causes close to Kevin and Carol’s hearts are those working directly with the homeless, with drug addicts, and women in prostitution. Organisations working in evangelism amongst young people, in family life and demonstrating Christian love in action in the public sphere.

 

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