Criminal Finances Act 2017: Facilitation Offences and Defence

The Criminal Finances Act 2017 tax evasion offences are two corporate crimes, set out in sections 45 and 46, that make a company or partnership automatically guilty when a person acting on its behalf criminally helps a taxpayer evade UK or foreign tax. Senior management does not need to have known about the facilitation, approved it, or benefited from it. The business’s only route out is proving, on the balance of probabilities, that it had reasonable prevention procedures in place when the facilitation happened, or that it was not reasonable to expect it to have any.

Evasion, Not Avoidance

These offences apply to criminal tax evasion only. The UK government treats evasion and avoidance as different things: avoidance means bending the rules to gain an advantage Parliament never intended, usually through artificial but technically lawful transactions, while evasion means deliberately not paying tax that is owed and is illegal.¹ A firm that helps a client pursue aggressive but legal planning is not committing a section 45 or section 46 offence. The criminal line is crossed when someone deliberately hides income, falsifies records, or cheats the revenue.

The Three Conditions for Corporate Liability

Prosecutors have to establish three things before a business is on the hook. A taxpayer must have committed a criminal act of tax evasion. A person associated with the business must have criminally facilitated that evasion. And the facilitation must have occurred while the associated person was acting in their capacity as someone connected to the business.²

Once all three are made out, the business is guilty unless it can prove the statutory defence. There is no requirement to show that anyone in senior management knew, authorised, or profited. The offence punishes the organisation’s failure to prevent the facilitation, not its participation in it.

What Facilitation Means Here

Facilitation under the Act means being knowingly concerned in, or taking steps toward, the fraudulent evasion of tax by another person.² Examples would include helping a client set up offshore structures designed to hide taxable income, deliberately misreporting figures on a tax return, creating false invoices, or routing payments through accounts to conceal their true nature. Negligence is not enough. The facilitator must have acted knowingly.

The underlying taxpayer also has to have actually committed a criminal evasion offence. If their behaviour turns out to be legal, however aggressive, nothing attaches to the business. And if the associated person acted in a purely personal capacity rather than for the business, the corporate offence is not triggered.

Who the Act Catches

The reach of the Act is set by two definitions.

Relevant Bodies

A relevant body is any body corporate or partnership, wherever incorporated or formed.³ Limited companies, LLPs, and traditional partnerships are all covered, as are foreign-registered firms of a similar legal character. Sector and size are irrelevant.

Associated Persons

An associated person is anyone who performs services for or on behalf of the relevant body and was acting in that capacity when the facilitation occurred. The statute names three categories: employees acting as employees, agents acting as agents, and any other person performing services for the body.³ That third category is deliberately open-ended. Independent contractors, subcontractors, and intermediaries can all qualify if they are providing services; the question turns on the full circumstances of the relationship, not the label.

Capacity matters. An employee who helps a friend evade tax at the weekend, with no connection to their employer’s business, is acting personally and does not trigger the corporate offence. The same employee doing the same thing for a client of the firm, using firm resources or in the course of their duties, is acting as an associated person.

UK Tax: Section 45

Section 45 covers the facilitation of UK tax evasion. A relevant body is guilty if an associated person criminally facilitates the evasion of any tax imposed under UK law, including national insurance contributions.² The underlying taxpayer offence can be cheating the public revenue at common law or a statutory offence of fraudulent evasion.

There is no territorial limit on which businesses can be prosecuted. A company incorporated overseas with no UK presence is still exposed under section 45 if its associated person facilitates evasion of UK tax. What matters is that the tax belongs to the UK treasury, not where the business sits. The organisation does not need to have made money from the evasion for the offence to bite.

Foreign Tax: Section 46

Section 46 extends the framework to foreign taxes but adds two filters. First, a UK nexus is required: the business must be incorporated under UK law, carry on business or part of a business in the UK, or some part of the facilitation must have taken place in the UK.⁴

Second, dual criminality applies. The conduct must be a criminal offence in the country where the tax was evaded, and it must also be conduct that would amount to tax evasion facilitation if it had happened in the UK.⁴ If the foreign jurisdiction does not criminalise the behaviour, section 46 does not apply, regardless of how the UK would see it domestically.

The Reasonable Prevention Procedures Defence

The only statutory defence is for the business to prove, on the balance of probabilities, that reasonable prevention procedures were in place at the time of the facilitation, or that it was not reasonable in all the circumstances to expect any such procedures.² The second limb exists for very small or simple organisations where a formal compliance programme would be disproportionate. Most businesses of any meaningful size will need to rely on the first.

Government guidance sets out six guiding principles for what reasonable procedures look like.⁵ They are not a checklist that guarantees acquittal. They are the framework a court will use to decide whether the organisation took its obligations seriously.

Risk assessment. The business identifies where it faces risks of associated persons facilitating evasion, documents those assessments, and keeps them under regular review.
Proportionality. Procedures match the scale, complexity, and risk profile of the business. A multinational bank needs far more than a small consultancy, but every business needs something proportionate.
Top-level commitment. Senior management actively drives a culture in which facilitating tax evasion is unacceptable, participating in the development of procedures and communicating the position visibly.
Due diligence. The business scrutinises its associated persons, including employees, agents, and contractors, and puts appropriate safeguards around higher-risk relationships.
Communication and training. Policies are embedded so that people actually understand them, with targeted training for higher-risk roles such as those in financial services, tax advisory, or accounting.
Monitoring and review. Procedures are reviewed regularly, at minimum annually, and updated when the business changes significantly.

The burden sits on the organisation, which reverses the usual position in criminal proceedings. A business that cannot produce evidence of a functioning prevention framework as it stood when the facilitation occurred will struggle. Policies that live in a handbook but are never communicated or enforced are unlikely to persuade a court.

Penalties and Knock-On Consequences

On conviction on indictment in the Crown Court, the penalty is a fine with no statutory cap.² Summary conviction in England and Wales also carries an unlimited fine; summary conviction in Scotland or Northern Ireland is capped at the statutory maximum. The absence of a ceiling lets courts scale the fine to the seriousness of the offence, the amount of tax evaded, and the degree of corporate failure.

A confiscation order under the Proceeds of Crime Act 2002 may follow. These orders require the convicted party to pay a sum calculated by reference to the financial benefit obtained from the criminal conduct, which for a corporate body can mean surrendering profits connected to the facilitation.⁶

Conviction also produces a criminal record for the organisation. Under the Procurement Act 2023, failure to prevent facilitation of tax evasion is listed as a ground for exclusion from public contracts. For businesses that depend on government work, that consequence alone can be existential.

How Much Enforcement Has There Been?

The offences came into force in September 2017. As of 31 December 2025, HMRC had secured one charging decision under section 45.⁷ HMRC has said it maintains a pipeline of live investigations and continues to review referrals.

Low prosecution numbers are not a reliable signal that the risk is theoretical. The reasonable prevention procedures defence is the only dependable protection, and the point of the legislation is that the defence has to be built before a problem arises, not after.

1
GOV.UK. 2010 to 2015 Government Policy: Tax Evasion and Avoidance
2
Legislation.gov.uk. Criminal Finances Act 2017, Section 45
3
Legislation.gov.uk. Criminal Finances Act 2017, Part 3 – Section 44
4
Legislation.gov.uk. Criminal Finances Act 2017, Part 3 – Section 46
5
GOV.UK. Corporate Offences for Failing to Prevent Criminal Facilitation of Tax Evasion
6
The Crown Prosecution Service. Proceeds of Crime
7
GOV.UK. Number of Live Corporate Criminal Offences Investigations