Be careful how you pay cleaning contractors. Your company may now be liable for tax evasion ©123RF
Be careful how you pay cleaning contractors. Your company may now be liable for tax evasion ©123RF

What procurement needs to know about the Criminal Finances Act

6 October 2017

Since the start of October, companies can be held liable and fined if any one of their suppliers, anywhere, evades taxes

Changes to the Criminal Finances Act may not be a major issue for large businesses, but for SMEs the burden is disproportionate, says Tim Wright, partner at Pillsbury Winthrop Shaw Pittman.

From the end of September, the act includes a new offence of facilitation of tax evasion, which makes businesses liable for tax evasion activities undertaken by employees and any person or business performing services on their behalf.

So if your contracted cleaning company, for example, agrees to cash payment from anybody in your business, not only is the contracting company committing an offence, so too is your firm, Wright says.

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