HMRC initiates first corporate prosecution under "failure to prevent" tax evasion laws
HM Revenue & Customs (HMRC) has initiated its first corporate prosecution under the "failure to prevent the facilitation of tax evasion" offence, introduced by the Criminal Finances Act 2017 (CFA 2017). This development marks a significant shift in HMRC's enforcement approach, which has faced mounting criticism for failing to use these powers since their introduction eight years ago.
SFO and DOJ strengthen partnership on financial crime
The Director of the Serious Fraud Office (SFO) and the Head of the Criminal Division at the US Department of Justice (DOJ) recently met to reaffirm their commitment to joint working in tackling financial crime. Their discussions focused on the DOJ’s latest white collar crime policies, including encouraging voluntary self-disclosure by companies and taking steps to reduce the duration of complex investigations for swifter justice. This meeting marks a significant milestone in strengthening international cooperation between the UK and US authorities, enhancing their ability to pursue fraud, bribery, and corruption more effectively. Both leaders emphasised the damaging impact of financial crime and the importance of coordinated action to restore market integrity and deliver justice to victims.
V@ update – July 2025
In the July edition of V@ update, our monthly update providing news and insightful analysis from the VAT world, we cover the following:
- M&S have launched a new Strawberries and Creme Sandwich inspired by the Japanese fruit sando. The unusual combination is causing controversy amongst food enthusiasts and VAT practitioners as to its VAT treatment
- HMRC Policy Paper – Employers will be able to recover VAT incurred on the costs of the investment management of defined benefit funds as their own input tax
- HMRC have updated their internal manual on VAT fraud in relation to deregistering businesses that misuse their VAT number following the recent cases of Impact Contracting Services Ltd v HMRC [2025] EWCA Civ 623 and Elphysic and others v HMRC [2025] UKUT 236 (TCC)
- HMRC is intensifying scrutiny on VAT treatment for flapjacks, cereal bars, and similar products, following the Court of Appeal’s decision in HMRC v Innovative Bites Ltd [2025] EWCA Civ 293
- Case reports
o R (on the application of ALR and others) v Chancellor of the Exchequer [2025] EWHC 1467 (Admin)
o JPMorgan Chase Bank NA v HMRC [2025] UKUT 188 (TCC)
o Performance Leads Ltd v HMRC [2025] UKFTT 660 (TC)
Financial Crime Time – Your update from RPC: 2025 Q2
RPC's Financial Crime Time, a round-up of news making the headlines in the world of financial crime and compliance. The latest edition explores a range of updates including:
- SFO sets out new route for self-reporting
- UK insurance broker charged with bribery offence in Ecuador
- SFO opens new financial crime investigation
- UK France and Switzerland set up new anti-corruption taskforce
- Reforms to Corporate Liability under the Crime and Policing Bill 2025
- former Liverpool mayor officials and associates charged with bribery offences
- Part 2 of Independent Review into Disclosure and Fraud gets underway
- SFO publishes 2025-26 Business Plan
- FCA announces new five-year strategy including prioritising combating financial crime.
What the "whistleblower" reward scheme means for tax compliance
The UK government intends to introduce a new reward scheme later this year to encourage informants to report tax fraud to HMRC. The government hopes that the new scheme will reduce the £46.8bn tax gap.
Unlike HMRC's current modest rewards (around £1m annually), the scheme is modelled on the more generous US and Canadian models, which offer substantial fixed-percentage payments based on the tax recovered.
Large corporations and wealthy individuals may face increased HMRC scrutiny from external sources and insider tip-offs. Even legitimate tax planning could trigger costly HMRC investigations.
To mitigate risk, organisations should review their tax compliance policies, ensure that there is robust documentation for complex transactions, consider voluntary disclosure strategies, and implement comprehensive internal whistleblowing policies to encourage staff to raise concerns internally rather than contacting HMRC directly.
SFO outlines performance in latest annual report
The Serious Fraud Office (SFO) has published its Annual Report and Accounts 2024–25, which outlines progress against its five-year strategy, focusing on fighting complex fraud, bribery, and corruption. The SFO opened eight new investigations, made six arrests, and secured over £1.3m in proceeds of crime, including its first Unexplained Wealth Order. Casework efficiency improved, with the average time from investigation to outcome reduced to 4.3 years. The SFO enhanced its use of technology, piloting machine learning for disclosure and procuring a new case management system. Staff engagement and diversity initiatives were strengthened, and international cooperation expanded, including joint work with its European partners.
Joint SFO/CPS corporate prosecution guidance published
New guidance has been published which sets out the common approach of the Crown Prosecution Service (CPS) and the Serious Fraud Office (SFO) to the prosecution of corporate offending in England and Wales. It covers the principles and statutory frameworks for establishing corporate criminal liability, including recent reforms under the Economic Crime and Corporate Transparency Act 2023, and details the mechanisms for attributing liability to companies and their officers.
COVID voluntary repayment scheme launched – last chance to resolve liability before tougher sanctions apply
On 12 September 2025, the UK Government launched a time-limited COVID repayment window, allowing individuals and businesses to voluntarily repay financial support received during the COVID-19 pandemic, with no questions asked.
The window closes in December 2025, after the deadline, tougher sanctions will be applied, including civil and criminal investigations, director disqualification and formal enforcement proceedings. This initiative forms part of the government's broader efforts to recover over £10bn lost to COVID-related fraud and signals a clear shift towards stricter enforcement.
