A "wake-up call" has been issued to businesses by legal firm Pinsent Masons over investigations by HM Revenue & Customs into a new anti-tax evasion offence.
The firm reports that nine businesses are being probed by HMRC for potential breaches of the new corporate criminal offence of failing to prevent the facilitation of tax evasion, with 21 other potential cases under criminal review.
They cover UK businesses of all sizes, operating across 10 different sectors including financial services, oil, construction, labour provision and software development.
Rules introduced in 2017 make it a criminal offence if a business fails to prevent its employees or agents from facilitating tax evasion. A successful prosecution can result in an unlimited fine and a criminal record for a business, restricting its access to some regulated markets and ability to bid for government contracts in the UK and overseas.
An offence can be committed even where the board is not aware of the conduct undertaken by their employees or subcontractors. The company must be able to prove that it has adequate procedures in place to prevent the facilitation of tax evasion.
Pinsent Masons said that the figures should act as a wake-up call to businesses, regardless of size and business sector.
Andrew Sackey, head of tax fraud investigations, commented: "HMRC worked hard to get these new criminal powers and is determined to use them. This news should set alarm bells ringing for any businesses in Scotland which have so far put dealing with the corporate criminal offences to the bottom of their compliance to-do list.
"All parts of the financial services sector are clear targets for HMRC's activities; however infrastructure, haulage, labour service providers and construction businesses also look particularly vulnerable to investigations under these rules because of their reliance on supply chains and subcontractor networks."
He added: "In terms of detection and intervention rates, the corporate criminal offence is already a far bigger risk to businesses than the Bribery Act. HMRC teams are increasingly conducting tax evasion investigations as normal, using either civil or criminal powers, and then exploring whether there has been a facilitation by someone associated with a company and, if so, testing if the company has the right controls in place. This makes it simpler to identify, investigate and subsequently prosecute non-compliant businesses.
"The fact that HMRC has confirmed that it is applying this offence across 10 business sectors with very different operating models reveals that they are using the power to send the message that corporates everywhere need to revisit their understanding of the risk of facilitation."