September 15th, 2017 / Insight posted in MKS Comments

Businesses risk unlimited fines over failing to prevent tax evasion

“Businesses have until the end of the month to put in place measures to ensure individuals working for them do not facilitate tax evasion. Perhaps because of limited resources, SMEs have largely ignored this deadline and have put themselves at risk of unlimited fines,” says Tim Stovold, head of tax at Kingston Smith. “Some SMEs will be unaware of the new rules, and others will not have prioritised complying with these new rules. Carrying out a full risk review of their business to identify areas such as controls over the receipt of large cash payments where the use of cash would be unusual, implementing new policies and re-training their staff could be a costly exercise. But smaller businesses should know that if there’s an allegation that one of their employees has facilitated someone else’s tax evasion, they will have no defence against fines levied if they hadn’t taken steps to try to prevent this happening. So they should at least implement basic processes such as a system where employees can report any suspicions for investigation by management.”