The UK’s Government has again been busy creating new corporate crimes to help enforce its policy objectives.

This time it relates to tax evasion, or more accurately “failure to prevent the facilitation of tax evasion”. Two new offences came into force on 30 September 2017 in the Criminal Finances Act 2017 – one for UK tax evasion and one for foreign tax evasion. As the HM Revenue & Customs (HMRC) press release says: “It is already a crime to evade tax, or deliberately help another person to do so, but on behalf of the majority of taxpayers who pay what is due, the UK government is taking an even firmer stance on corporate fraud in a move designed to drive a change in corporate culture.” Much like anti-bribery and corruption rules your company’s defence is to prove you have reasonable prevention procedures in place. HMRC has provided guidance on this, which this blog summarises for you.

Who is this relevant for?

All companies and partnerships in all industries will need to put some prevention procedures in place. Higher risk sectors e.g. accountancy, tax advice, wealth management and legal services will need to do more.

What are the offences?

There’s three parts: (1) a taxpayer commits criminal tax evasion, (2) a person who is acting on behalf of your company or partnership commits an offence by “deliberately and dishonestly” helping the taxpayer evade tax (“facilitation”), and (3) the company failed to take reasonable steps to prevent this criminal facilitation. Part (3) is the corporate offence and the only part that’s new. For the UK tax evasion offence the company or its business could be based abroad. For the foreign tax evasion offence only the company, its business or some of its staff needs to be based in the UK. It doesn’t matter whether the senior management / board were aware of the facilitation or not.

What’s tax evasion (illegal) and what’s tax avoidance (legal)?

This is not an easy question as the line is increasingly blurred but the HMRC guidance provides some examples of criminal facilitation of tax evasion:

· A mid-size car parts maker operating in the UK and Europe, entered into a sub-contracting arrangement with an UK distributor. The senior managers of the UK distributor created a false invoicing scheme with the assistance of a purchaser, allowing the purchaser to evade UK taxes due on its purchase of the car parts in the UK.

· As part of a large transaction an employee of a UK-based multinational bank knowingly referred a corporate client to an offshore accounting firm with the express intention of assisting the corporate client to set up a structure allowing the client to evade foreign income tax.

Existing procedures won’t cut it

Companies and partnerships who operate in the UK or deal with UK tax will need to put in place yet more compliance procedures – HMRC is very clear that your existing anti-bribery and corruption, fraud prevention or financial crime prevention procedures (if applicable) will help but aren’t enough on their own.

So what do you need to do?

According to HMRC guidance every company and partnership needs to firstly undertake a risk assessment of the products and services it offers, as well as internal systems and client data that might be used to facilitate tax evasion. This includes “sitting at the desk” of employees and other associated persons, considering the motive, means and opportunity for facilitating tax evasion. When doing this you should consider typical fraud “red flags”, for example:

Are there staff who refuse to take leave and do not allow anyone else to review their files, or are overtly defensive over client relationships?
Do existing processes ensure that for higher risk activity at least a sample of files are routinely reviewed by a second pair of eyes?
Then consider tailoring existing processes and procedures accordingly to prevent and detect potential tax evasion facilitation – this could include:

Having a commitment to preventing the involvement of those acting on your behalf in the criminal facilitation of tax evasion, demonstrated by issuing a prominent message from the board of directors, partners or leadership team against all forms of tax evasion;

  • Having terms in contracts with employees and contractors requiring them not to engage in facilitating tax evasion and to report and concerns immediately;
  • Providing regular training for staff on preventing the facilitation of tax evasion;
  • Having clear whistle-blowing procedures;
  • Ensure your pay and bonus policy/structure encourages reporting and discourages pursuing profit to the point of condoning tax evasion;
  • Having regular reviews of the effectiveness of prevention procedures and refining them where necessary; and
  • Monitoring and enforcing compliance with prevention procedures.

These are merely the basics for SMEs and need to be tailored to the organisation’s specific risks. Larger or higher risk companies and partnerships will need to do more on top of this to comply but may have guidance from their sector regulator to help them.

When do we need to do this?

HMRC is expecting you to be doing your risk assessments and initial staff communications now and to have a clear timeframe for putting the other procedures in place.

Getting help

For more information or help with complying contact the Corporate Team at Blackadders. Thanks to Sara Scott, our Regulation & Compliance Manager for input to this article.

Alasdair Cummings (2) - Yes cropped & resizedLindsays has moved to new offices in central Glasgow, reflecting the growth of the award-winning law firm’s team, services and client base in Glasgow and the West of Scotland.

The new offices are at 100 Queen Street, at the heart of the city’s corporate and professional services district in the building recently recognised as the Best Refurbished and Recycled Workplace at the British Council for Offices’ regional property sector awards. The new base offers a client-friendly and professional environment for the full-service legal firm, which now has almost 60 staff in Glasgow.

Lindsays has taken the 3rd floor of the newly refurbished Art Deco building, which is close to all major transport links and convenient for clients from both Glasgow and beyond.

Alasdair Cummings, the firm’s Managing Partner says, “As a result of our growth in Glasgow, we’d outgrown our old offices in Royal Bank Place. The move to Queen Street has put us exactly where we want to be – with the space, professional facilities and location to support corporate clients, charities, families and individuals with all the legal services they need.”

Alasdair added, “Our move sees the relocation of an award-winning firm to an award-winning building. This gives us a great place to develop our team in Glasgow and we are excited about embarking on this new chapter for the firm.”

Lindsays’ growth in Glasgow has been both organic and through acquisitions. The firm acquired Brodies’ personal injury business earlier this year which strengthened the Glasgow team, and brought the number of partners based here to 11. These partners include the heads of Lindsays highly-regarded employment law, family law, and personal injury teams.

Overall the firm has grown significantly over the last five years and staff numbers have increased by 46%, expanding its full-service presence across all three of its city-centre offices in Edinburgh, Glasgow and Dundee. Lindsays now has 44 partners and over 200 staff.

Thorntons Trainees- September 2017,Leading Scottish law firm Thorntons has appointed eight recruits for its traineeship programme this month – believed to be the most comprehensive and varied scheme in the sector.

The new recruits will undertake a two-year traineeship and will shadow senior staff across Thorntons’ 10 offices. They will learn from a comprehensive programme, which reaches across many of Thorntons’ specialist teams, and will develop their legal and client communication skills.

Scott Milne, Joint Managing Partner at Thorntons, said: “Investing in training and development of our people demonstrates our investment in the future of our business, as well as the legal profession as a whole.

“Our renowned trainee programme has developed significantly over the course of many years. Thanks to our diverse range of clients and work, our trainees receive the opportunity to gain crucial experience in the widest possible range of legal specialities.

“Developing our own highly-skilled people is very much part of our growth strategy and will improve our overall client experience. It also helps upskill our existing team because none of us ever stop learning, regardless of our level.”

The eight trainees for 2017 are Vicki Alexander, Emily Flett, Katie Fulton, Victoria Guild, George McLaughlin, Stephen O’Hare, Kirsty Waughman and Katy Williams. This year’s trainees come from all across Scotland including Glasgow, Dundee, Perth, Kinross, Inverness, Anstruther and Ayrshire.

Katy Williams, trainee at Thorntons, said: “From work experience eight years ago to starting a traineeship with Thorntons in 2017, I am very excited about beginning my career with the firm that inspired my choice of profession.

“As a full service firm Thorntons is able to offer its trainees the opportunity to gain a wide variety of experience and knowledge through giving them responsibility and including them in interactions with clients from the start. I have already learnt a great deal and have found that no question is ever too silly.”

Thorntons has offices in Dundee, Perth, Edinburgh, St Andrews, Cupar, Anstruther, Kirkcaldy, Arbroath, Montrose and Forfar.

Scott continued: “As well as developing their legal skills, the new recruits will also receive guidance in the importance of exemplary client care and strong communication – something Thorntons takes great pride in.

“We believe this is one of the most varied and comprehensive traineeships in the sector. Our eight new trainees will enjoy a strong foundation for the start of a career in the legal profession. We hope that many will continue their career development with the firm upon completion.”

Pictured above, from back left to right: Victoria Guild, Vicki Alexander, Stephen O’Hare, Scott Milne (Joint Managing Partner), Colin Graham (Chairman), Emily Flett
From front left to right: Katy Williams, Kirsty Waughman, Katie Fulton, George McLaughlin and guide dog Millie.

Tax and Private client teamLeading Scottish law firm Gillespie Macandrew has bolstered its Tax and Private Client team, with the recruitment of Tax Director Anne Marie Renz and Senior Tax Manager Alison Pryde.

Anne Marie is a Chartered Accountant with over 20 years’ experience advising on an extensive range of personal and business tax issues including business acquisitions and disposals, group reorganisations, business structuring and strategic capital gains tax and inheritance tax planning. She has particular expertise in property tax issues advising developers, investors and landowners on areas such as LBTT, VAT and capital allowances.

Alison has extensive experience of personal tax working within “The Big Four” accounting firms. She advises a variety of clients including individuals, trusts, partnerships and landed estates particularly in relation to Inheritance and Capital Gains Tax and the taxation of land. Alison will also be responsible for the management of Gillespie Macandrew’s tax returns team, ensuring the firm’s clients are compliant under the self-assessment regime.

Both are experienced Chartered Tax Advisors (CTAs) and join the Tax team at Gillespie Macandrew which already includes 2 CTAs and two members of the Association of Taxation Technicians in a Private Client Team where most are members of the Society of Estate Practitioners (STEP).

John McArthur, Head of Tax at Gillespie Macandrew said:
“Anne Marie’s and Alison’s appointments further develop our impressive tax capabilities, enhancing a team which already provides complex tax and legal advice to our clients and other professional advisers whether individuals, businesses, farmers or other land owners, particularly around inheritance tax. I look forward to working with them as we continue to build strength and depth in our private client and tax team.”

Fiona Morton, Chair of Gillespie Macandrew, said:
“Tax is a very important service at Gillespie Macandrew as it plays a key part in virtually all private client, commercial and property transactions. I am delighted to welcome Anne Marie and Alison to both the team and the firm. Their expertise will further strengthen this experienced team and help drive further expansion in one of our key growth areas.”

Photograph Caption: From left to right: Michelle McNeill (Associate), Anne Marie Renz (Tax Director), Alison Pryde (Senior Tax Manager), John McArthur (Head of Tax).

Kenneth Shand, Jeremy CohenLeading Scottish firm Maclay Murray & Spens announced today that it is to combine with Dentons, the world’s largest law firm.

The combination, which is expected to complete later in 2017 following approval by the partnerships of both firms, will offer clients the services of around 800 fee earners in the UK, including 200 partners, operating from offices in Aberdeen, Edinburgh, Glasgow, London, Milton Keynes and Watford.

“This combination will significantly enhance our scale and capabilities in the UK,” said Dentons’ Global Chief Executive Officer Elliott Portnoy. “Combining with strong, independent and well-established firms is central to Dentons’ ‘in and of the community’ ethos, and with its rich history in the Scottish market Maclay Murray & Spens fits very much into this category. Following soon after our recent combinations with equally high-quality firms in Latin America and the Netherlands, this development accelerates Dentons’ momentum as we continue our journey ‘from largest to leading.'”

“Maclay Murray & Spens is a Scottish leader in some of our strongest practices and sectors including Financial Services, Energy, Transport & Infrastructure, and Real Estate,” said Jeremy Cohen, Chief Executive Officer for Dentons’ UK and Middle East region. “By combining we will also significantly increase our out-of-London capability. Working seamlessly with colleagues in London, our Milton Keynes and Watford offices already enable us to deliver enhanced value to many of our largest clients. This combination will upscale that ability by a very considerable margin.”

“Joining forces with the world’s largest law firm is tremendously exciting for us,” said Kenneth Shand, Chief Executive Officer of Maclay Murray & Spens. “With offices across the Americas, Europe, Africa and Asia-Pacific, Dentons will unquestionably be the only significant player in Scotland which is a genuinely global firm. We will have a unique ability to offer Scottish businesses with international ambitions access to the largest array of legal talent in the world, and international firms with an interest in Scotland, the resources of one of the world’s most innovative and forward-thinking law firms.”

“Our vision is to offer clients the ‘law firm of the future’ now,” said Dentons’ Global Chairman Joe Andrew. “By enhancing our ability to serve national and multi-national clients in the UK, the world’s second largest legal market, and continuing to innovate in client service delivery, Dentons continues to set the pace in the global legal market.”

Maclay Murray & Spens LLP (MMS), the UK-wide commercial law firm, has announced the promotion of 20 lawyers, including two new partners, as it recognises and rewards the exceptional performance of lawyers across all four of the firm’s offices in Aberdeen, Edinburgh, Glasgow and London.

The promotions, which coincide with the start of the firm’s new financial year, see two lawyers promoted into the partnership, two new directors, 11 new associates and five solicitors moving up to senior level.

James Wilson becomes a partner in the banking and finance practice in Edinburgh, while commercial property specialist David Rose has been promoted to partner in the property practice in Aberdeen.

Kenneth Shand, chief executive of MMS, said: “The promotions underscore the continued growth of key practice areas across the firm and reflect the breadth and depth of experience of our talented lawyers, who have demonstrated their dedication to our clients. It also reinforces our commitment to rewarding the exceptional performance of our home-grown lawyers.”

The following promotions came into effect on 1 June:

Partner

James Wilson, Banking & Finance, Edinburgh
David Rose, Property, Aberdeen

Director

Mark Stewart, Corporate, London
Lyndsey O’Connor, Property, London

Associates

Anna Crosby, Banking & Finance, Aberdeen
Roisin Forde, Banking & Finance, London
Ferky Azib, Commercial Dispute Resolution, London
Sarah McCormick, Commercial Dispute Resolution, Edinburgh
Linzi Hedalen, Construction & Engineering (Contentious), Edinburgh
Sophie Applewhite, Employment, Pensions & Immigration, London
Jennifer Connolly, Private Client & Charities, Glasgow
Donna Bryson, Property, Glasgow
Jayne Ferguson, Property, Glasgow
Tom Hepburn, Property, Glasgow
Fiona McDonald, Housing & Care, London

Senior Solicitor

Nicola Watson, Banking & Finance, Aberdeen
Susan Currie, Capital Projects, Edinburgh
James Todd, Capital Projects, Edinburgh
Jamie Dunne, EU, Competition & Regulatory, Edinburgh
Iain Smith, Property, Glasgow