September 15, 2021

How Solutio ensures Criminal Finance Act compliance

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Find out what you should be doing to prevent tax evasion and how Solutio can help.

Are you sure your company is abiding by the Criminal Finance Act? Remember that bill from 2017 that had your accounting team’s head spinning? It’s coming back to haunt us.

On the 9th of September 2020, the UK Lord Chancellor spoke at the University Of Cambridge about the government’s plans to combat economic crime.

During his speech, he referenced The Criminal Finance Act of 2017, a law that states companies can be held liable for fines or even prison time if they ‘fail to prevent’ tax evasion.

“In their current form, there is concern that the law on corporate criminal liability does not always appropriately criminalise corporate misbehaviour, especially when applied to large corporations. Reform may indeed be needed to ensure that organisations of all sizes can be held to account and serious crimes can be punished appropriately.”

It appears that 4 years on, they’re now revisiting this Act, so we thought it would be an excellent time to give you a refresher on what the Act means, how it can affect your company, and the best part – how we can help!

The what act?

Okay, so it’s been quite a while since you’ve seen this topic discussed. Maybe you met with your team about it 4 years ago, implemented some procedures, and hoped your accounting department would follow them.

But have you been conducting regular checks to ensure you’re complying with the Act? If you haven’t, now is the time. Let’s start by jogging your memory on what The Criminal Finance Act is:

Back in 2017, the Act introduced a range of new offences to crack down on financial crime. Included were two specific violations related to tax evasion, which were previously very hard for the government and HMRC to enforce.

Part of the reason was that there wasn’t enough evidence or proof that companies had an awareness of their employees’ schemes. So the UK government and HMRC brought in these two new offences; the failure to prevent the facilitation of tax evasion in the UK and the failure to prevent the facilitation of tax evasion overseas.

In other words, any company that knowingly or unknowingly helps someone evade taxes could face fines if they don’t have an anti-fraud policy in place. The government also made it clear they’d have no issue publishing the names of these companies.

“The new offences will ensure that companies doing business in the UK take reasonable steps to prevent their staff from facilitating tax evasion.” – Financial Secretary Mel Stride MP, 2017

Companies can no longer claim ignorance as a defence for someone committing tax fraud. If an employee aids in the evasion of taxes, even if unknowingly, they will be liable under UK law.

So, if your company hasn’t implemented compliance procedures to ensure you’re doing everything in your power to stop clients/ employees from evading taxes, your reputation and profit are at risk.

How Solutio helps

Maybe you don’t have the resources to implement compliance procedures for this Act or aren’t sure if you’re following it to the letter. Solutio is a fantastic solution that helps you adhere to the Criminal Finance Act in several ways.

To fully comply with the Criminal Finance Act, we will talk through the 6 compliance procedures the government recommended you follow and how Solutio helps you follow them.

  1. Top level commitment
    The government must see an active role in procedures to combat tax evasion from the top-down. That means senior management creating a formal statement on how your company will handle compliance with the act.
     
    Our solution
    Solutio offers a centralised platform for holding and enforcing all your finance compliance procedures. You can prove your top level commitment to the government with detailed electronic records maintained in our system.
  2. Risk assessment
    By conducting a risk assessment, you’re showing the government that your company is taking proactive measures to identify possible criminals.
     
    Our solution
    With Solutio’s advanced analytics software, you can easily spot tax discrepancies or clients with offshore accounts and identify what clients/employees could be putting you at risk. All your employees or clients tax records, working hours, holiday pay, etc. are automated by our system, so you’ll always have a full view of your entire organisation’s finances.
  3. Proportionality of risk based prevention processes
    In plain English, this is about both designing and implementing procedures within your company to prevent tax evasion from occurring on your watch.
     
    Our solution
    Solutio has integrated tools that allow you to customise automated compliance procedures to your needs. So if your company has introduced strict tax compliance checks every week, not only will those unique procedures be documented within our system, you’ll also be able to set alerts to ensure your staff are following them.
  4. Due diligence
    The government recommends a policy of ‘due diligence’ which encourages you to pay closer attention to the areas of your business, clients, or employees that might pose a greater risk of tax evasion.
     
    Our solution
    Solutio can help you identify what areas you should emphasise when it comes to maintaining compliance with it’s feature rich platform that offers in-depth data analysis. You can easily view your employee and client files to identify what ones might be a threat.
  5. Communication (including training)
    Financial crime training must be given to both internal and external parties associated with your business. The training needs to explain the severity of what could happen to the company and the individual if they were held liable for tax evasion. The training should also explain the procedures for avoiding this and how to implement them.
     
    Our solution
    Solutio not only helps you automate your compliance procedures thereby reducing your risk of being associated with tax evasion. The platform also ensures that your entire organisation is always up to date with your latest documentation by storing compliance procedures internally. If the HMRC investigates, you have proof ready and waiting that you had implemented procedures
  6. Monitoring and review
    The final compliance guidelines suggest regularly checking in on how your company is implementing your procedures for combating tax evasion and reviewing it’s effectiveness.
     
    Our solution
    Solutio uses cloud technology to keep track of real-time data for your company or employee’s tax records. This leaves an impressive audit trail you can follow to review your compliance procedures and how your employees have implemented them.

Solutio is your all-in-one solution for payroll and compliance. It automates time-consuming compliance procedures, let’s you store all your documents in one place and offers comprehensive analytics to monitor your entire organisation’s tax records.

If you’re a recruitment agency or an umbrella company, you’ll be able to manage all your employee and third party records without switching between multiple platforms.

Using Solutio not only helps you comply with the Criminal Finance Act it also automates compliance for other financial regulations like PAYE and holiday pay. See how you can save time and streamline your entire payroll process with Solutio today by booking a demo with one of our team. Low monthly fee, no long contracts.