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What does the Criminal Finance Act 2017 mean for recruitment agencies?

Published on: 21st September 2017

On the 30th September, new laws come into force which mean recruitment agencies, (and other businesses) could be fined and find themselves facing criminal charges for failure to prevent the facilitation of tax evasion.

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For example, a recruitment agency could face charges where an employee has in some way facilitated tax evasion.  Under the new laws an organisation could be prosecuted even if there is no evidence of any financial gain to the organisation and even if they were unaware of the actions of their employee (or an associated person).

What constitutes an offence?

There are essentially 3 main stages which constitute an offence:

1) There must be criminal tax evasion by a taxpayer
2) Criminal facilitation of the tax evasion by an associated person of the relevant body
3) The organisation failed to prevent its representative from committing the criminal facilitation

What can recruitment agencies do?

The changes place an additional obligation on recruitment agencies to take what are described as reasonable preventative measures.   So, what can agencies do?

> Be aware of the new laws and take the time to understand the changes and the potential repercussions.  If you have any concerns about the change or any aspects of the Criminal Finance Act 2017 aren’t clear the seek professional advice.

> Review supply chains and preferred supplier lists.  The changes make it more important than ever to ensure your preferred supplier list only includes businesses that you trust and are confident will act professionally and compliantly.  When it comes to umbrella, payroll or accountancy services look for organisations which adhere to a code of conduct.  At Exchequer Solutions, we are associate members of the FCSA and our sister company Exchequer Accountancy is a firm of chartered accountants.

> Undertake a risk assessment. Look at processes within your organisation, identify any areas where your company could be vulnerable and take action to improve things.

> Ensure staff are fully briefed, have received relevant training and understand how significant the new law is.

> Monitor and review all internal processes, preferred supplier lists (PSLs) and any suppliers on a regular basis.

If you recommend Exchequer Solutions to your contractors then you can rest assured that you are working with a fully compliant organisation.  If you have any questions about the changes please get in touch.