1. Corporate Criminal Offences (CCO)
Davies Group Limited
Corporate Criminal Offences (CCO)

2. What is the CCO?
The Corporate Criminal Offence of Failure to Prevent the Facilitation of Tax Evasion (‘CCO’) is part of a continued, global focus on the prevention of tax evasion and other financial crimes. The aim of the legislation is to overcome the difficulties in attributing criminal liability to corporates (our business) for the criminal acts of “associate persons” i.e. facilitating tax evasion.

3. Why do we need to know it? IMPLICATIONS OF NEW LEGISLATION
This legislation applies to all taxes, and is relevant to all businesses whatever their size or industry sector.
SANCTIONS
A successful prosecution could lead to:
An unlimited fine
Public record of the conviction
Significant reputational damage and adverse publicity

4. Associated Persons
The actions of any person (whether or not in the UK) providing services ‘for or on behalf of’ Davies could bring us within the scope of the legislation.
This would mean that the business could be subject to prosecution by dealing with these parties if they evade tax.
The actual offence of facilitating tax evasion does not have to have been committed within the Davies Group for us to be prosecuted. A business which fails to prevent the deliberate facilitation of tax evasion is also liable.
There are two corporate offences – a domestic fraud offence and an overseas fraud offence.
In our case, Associated Persons are:
All Employees (whether UK or Ireland Based)
All Contractors / Sub-Contractors
All Suppliers

5. The Domestic offence (UK)
Stage 1
Criminal tax evasion by a taxpayer (either an individual or an entity) under the existing UK law
Stage 2*
Criminal facilitation of this offence by an ‘associated person’ – in other words, a person acting on behalf of the corporation and knowingly aiding, abetting, counselling or procuring the tax evasion by a taxpayer
Stage 3*
The corporation failed to put in place reasonable procedures to prevent an ‘associated person’ from committing a tax evasion facilitation offence as defined in Stage 2
*This relates to UK tax, but can be assisted anywhere in the world

6. The Overseas Offence
As we carry out business outside of the UK, even though this does not relate to UK tax, the law still applies as the Davies Group Ltd are a UK company.
Stage 1
Criminal tax evasion by a taxpayer (either an individual or an entity) under the existing law of the overseas jurisdiction that would amount to a criminal offence in the UK. The category of tax does not have to be equivalent, but the criminal offence does
Stage 2*
Criminal facilitation of this offence by an ‘associated person’ of the corporation. This act, if carried out in the UK would amount to a criminal offence and constitutes a criminal offence in the jurisdiction suffering a tax loss
Stage 3*
The corporation failed to put in place reasonable procedures to prevent an ‘associated person’ from committing a tax evasion facilitation offence as defined in Stage 2
*This relates to UK tax, but can be assisted anywhere in the world

7. Example Case Study 1
UK supplier approaches employee of Davies Group and requests two separate purchase orders to be supplied, one made to Supplier Ltd and another to a different company, although the full order will be despatched in one order
Davies Group employee complies with request
True value of products recorded in Davies Group accounts
Supplier only records sales as per PO made to Supplier Ltd, resulting in lower profits, lower CT payable, lower output VAT payable: resulting in tax evasion of two UK taxes

8. Example Case Study 2
A regular contractor requests change to payment arrangements wherein 90% of contractor’s invoiced fees are to be paid to normal trading account of contractor, with remaining 10% paid to British Virgin Islands bank account
Employee of Davies Group agrees to amend payment arrangements to contractor
Contractor carries out work and payments are made as requested by the contractor
Contractor only recognises 90% of invoiced fees resulting in lower profits: resulting in evasion of income tax

9. Your Responsibility Step 1 Step 2
If you suspect that any party is attempting to commit tax evasion, or is assisting another party to commit tax evasion, it is vital that you report this immediately.
Step 1
Raise the concerns with your Line Manager
Step 2
If deemed appropriate, this will then be referred to our Compliance Team who will investigate it further

10. Questions