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Criminal Finances Act: 5 Steps Recruitment Agency Directors Should Take

Criminal Finances Act

It’s now just a matter of weeks until the Criminal Finances Act becomes law.

The legislation, which comes into force on 30th September, creates a new corporate offence of ‘failure to prevent the facilitation of tax evasion.’

Top five recommendations

Time is running out, but there is still time to act in order to get your agency ready for the Criminal Finances Act. Here are our top five recommendations.

  • Do your research – Take the time to read the legislation in full. Don’t just rely on guidance or any broad industry commentary.
  • Train your staff – Ensure your workforce is up to speed with the Criminal Finances Act and fully aware of the implications of a breach .
  • Take a fresh look at your processes – Conduct an in-depth (and urgent!) process audit. This should help you to identify any areas of weakness and potential exposure.
  • Review your PSL – Ask your current suppliers, including umbrella and contractor accountancy providers, for evidence that they operate in a compliant, ethical manner when it comes to HMRC tax law. Finding out if they are members of the Freelancer & Contractor Services Association (FCSA) is a good place to start.
  • Get external advice – If you are worried that you may be vulnerable, it may be wise to seek professional advice from qualified, external experts.

Remember, under the Criminal Finances Act liability applies even if the senior management of the business had no involvement in, or awareness of, what was going on.

A business will only have a defence if it can prove either that:

  1. it had reasonable prevention procedures in place to prevent the facilitation of tax evasion, or;
  2. it was not reasonable in the circumstances to expect procedures to be in place.

This is a significant piece of legislation and a welcome step in the ongoing fight to raise standards in the recruitment and contractor services sector.

We recommend that all agency directors carry out a thorough review of their supply chain and factor in the Criminal Finances Act when making PSL decisions.


Written by Shaun Critchley, Managing Director at Advance  

Tagged With: Blog, Criminal Finances Act, Finance, recruitment agency

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