First prosecution for failure to prevent facilitation of tax evasion

HMRC has initiated its first-ever corporate prosecution for failure to prevent the facilitation of tax evasion, almost eight years after the offence was introduced by the Criminal Finances Act 2017 (CFA 2017).

The charges, brought against Stockport-based accountancy firm Bennett Verby Ltd, relate to an alleged UK research and development repayment fraud. Six individuals, including a former director of the firm, were also charged with offences, including cheating the public revenue and money laundering. All the defendants appeared at a directions hearing in Manchester Crown Court on 7 August 2025 but did not enter formal pleas, with the trial listed for 27 September 2027.

The prosecution marks a turning point in HMRC's approach to enforcement amid mounting criticism of its failure to bring charges under the offences which came into force on 30 September 2017.

Failure to prevent facilitation of tax evasion offences

The CFA 2017 introduced two new corporate criminal offences designed to combat tax evasion and its facilitation:

• Failure to prevent facilitation of UK tax evasion offences (section 45).

• Failure to prevent facilitation of overseas tax evasion offences (section 46).

Under these provisions, a company, partnership or other body corporate can be held liable if someone associated with it (such as an employee, agent, contractor or other person performing services for or on behalf of the organisation) criminally facilitates tax evasion, and the organisation has not implemented reasonable prevention procedures.

Both are strict-liability offences, meaning prosecutors do not need to prove that senior management knew about or intended the wrongdoing. This is intended to overcome challenges in prosecuting large organisations posed by the "identification principle", which - save where legislation provides for strict liability - requires establishing that the suspected wrongdoer was the "directing mind and will" of the company.

Implications for businesses

This long-awaited prosecution forms part of a broader trend in the UK towards a more hawkish approach to corporate crime enforcement, with, for example, the failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act 2023 due to come into force shortly on 1 September 2025. In addition, Companies House, the Insolvency Service and the Serious Fraud Office have all recently been granted new powers to prevent and/or combat corporate crime.

Against this backdrop, the prosecution of Bennett Verby Ltd may signal a more robust approach from HMRC to enforcement. This may well be the first of a number of charges to be brought under the CFA 2017.

Businesses should, therefore, take this opportunity to review and, if needed, reinforce their compliance procedures to mitigate the risk of facilitating tax evasion. Recommended next steps include:

• refreshing risk assessments: update facilitation of tax evasion risk assessments, including identifying any changes in areas of the business where there is a risk of facilitating tax evasion (e.g. new products/services, new geographies);

• reviewing existing prevention procedures: assess existing policies and controls aimed at preventing the facilitation of tax evasion to ensure they remain fit for purpose;

• delivering training: ensure employees and relevant third parties receive regular training to identify tax evasion and facilitation of tax evasion risks and understand their role in preventing their occurrence; and

• documenting compliance: keep detailed records of compliance efforts to demonstrate reasonable procedures have been implemented.