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Corporate Criminal Offence

Photo of Lourens Du Plessis Lourens du Plessis
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 (CIOs) 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 (for example sponsorship)
  • pretending a payment for benefits provided is a donation (for example 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

Lourens du Plessis

Lourens leads our teams who guide and strengthen churches and Christian charities with their governance and finances. Our professional services include independent examinations of charities’ accounts, an award-winning payroll bureau, consultancy and governance advisory services and helping charities get registered with the Charity Commission. He joined Stewardship in 2020 and brings with him a wealth of experience in both the charity and commercial sectors. He’s a member of the Charity Community Advisory Group of the Institute of Chartered Accountants in England and Wales, and regularly interacts with regulators in the sector.

Before joining Stewardship he worked for an international church developing governance and financial stewardship for various ministries. Prior to that Lourens had a senior role at a Big Four firm in the City, advising international investment banks. He is a qualified Chartered Accountant and has a postgraduate degree in Theology.

Lourens grew up in South Africa, but has spent the majority of his working life in London.  He is a member of the International Presbyterian Church in Ealing. He is also a trustee of a number of other churches and charities, including a new pregnancy counselling centre, and he’s involved in initiatives to help Christians better integrate their faith and work.

Lourens supports causes which encourage bringing the gospel to people in his neighbourhood and to the ends of the earth, and particularly supporting persecuted Christians around the world.