Anti-Facilitation of Tax Evasion Policy

About this Policy 

The Society is committed to acting professionally, fairly and in accordance with our DOES values in all our business dealings and relationships. We take a zero-tolerance approach to facilitation of tax evasion.  

This policy sets out how the Society seeks to uphold all laws relevant to countering tax evasion, including the Criminal Finances Act 2017.

This policy applies to all colleagues (whether employed on a full-time, part-time, fixed term or permanent basis), as well as agency staff and contractors, or all persons working on our behalf in any capacity.

This policy does not form part of any colleague’s contract of employment and we may amend it at any time.

 

Who is Responsible for this Policy? 

The Society Secretary and Head of Governance has overall responsibility for ensuring this policy complies with our legal and ethical obligations.

An assessment of particular risk areas of tax evasion within our business has been carried out and those risk owners identified. However, it is important for all colleagues to have awareness of potential tax evasion and take appropriate steps in accordance with this policy.

All colleagues must ensure that they read, understand and follow the guidelines set out in this policy. If a colleague becomes aware of suspected tax evasion or this policy being breached, they are encouraged to raise concerns as soon as possible to ensure the matters are dealt with quickly and efficiently. Details of how concerns can be reported are here.

All managers must follow the guidelines in this policy and report any concerns regarding potential tax evasion or facilitation where it is suspected. Managers are responsible for ensuring those colleagues reporting to them understand and comply with this policy.

Our zero-tolerance approach to tax evasion must be communicated to all suppliers, contractors and business partners at the outset of our business relationship with them and as appropriate after that.

 

What is Tax Evasion? 

Tax evasion and its facilitation can occur in a number of ways. We have included some examples in the “red flags” section below.

Provided that colleagues follow the Society’s established practices and policies, facilitation of tax evasion should be avoided. However, colleagues must be alert to the possibility of others (whether colleagues or third parties) acting in ways that may amount to tax evasion and report such conduct if they see it.

The following definitions apply to this policy:

Tax evasion means the offence of cheating the public revenue or fraudulently evading UK tax, and is a criminal offence. The offence requires an element of fraud, which means there must be deliberate action, or omission with dishonest intent.

Foreign Tax Evasion means evading tax in a foreign country, provided that conduct is an offence in that country and would be a criminal offence if committed in the UK. As with tax evasion, the element of fraud means there must be deliberate action, or omission with dishonest intent.

Tax evasion facilitation means being knowingly concerned in, or taking steps with a view to, the fraudulent evasion of tax (whether UK tax or tax in a foreign country) by another person, or aiding, abetting, counselling or procuring the commission of that offence. Tax evasion facilitation is a criminal offence, where it is done deliberately and dishonestly.

Tax evasion is not the same as tax avoidance or tax planning. Tax evasion involves deliberate and dishonest conduct. Tax avoidance is not illegal and involves taking steps, within the law, to minimise tax payable (or maximise tax reliefs).

Tax means all forms of UK taxation, including but not limited to corporation tax, income tax, value added tax, stamp duty, stamp duty land tax, national insurance contributions (and their equivalents in any non-UK jurisdiction).

 

What Colleagues Must Not Do

To ensure that facilitation of tax evasion does not occur, it is not acceptable for any colleague (or someone acting on their behalf) to:

• Engage in any form of facilitating tax evasion or foreign tax evasion.

• Aid, abet, counsel or procure the commission of a tax evasion offence or foreign tax evasion offence by another person.

• Fail to promptly report any request or demand from any third party to facilitate the fraudulent evasion of tax (whether UK tax or tax in a foreign country), or any suspected fraudulent evasion of tax (whether UK tax or tax in a foreign country) by another person, in accordance with this policy.

• Engage in any other activity that might lead to a breach of this policy.

• Threaten or retaliate against another individual who has refused to commit a tax evasion offence or who has raised concerns under this policy.

 

How to Raise a Concern 

Colleagues are encouraged to raise concerns about any suspicion of tax evasion or foreign tax evasion at the earliest possible stage.

If colleagues are unsure about whether a particular act constitutes tax evasion, they should raise it with their line manager or the Society Secretary & Head of Governance. A deliberate failure to report suspected tax evasion, or “turning a blind eye” to suspicious activity could amount to criminal facilitation of tax evasion.

Colleagues can raise a concern in one of the following ways:

• To their line manager, who must take steps to raise the concern further, where appropriate; or

• To the Society Secretary & Head of Governance, Edward Parker, who can be contacted by email: edward.parker@midcounties.coop or by telephone: 01926 516 006 or mobile: 07976 055 427, or by post at The Midcounties Co-operative, Co-operative House, Warwick Technology Park, Warwick CV34 6DA; or

• Anonymously through the whistleblowing confidential line on 0800 458 78 09. A copy of the Society’s Whistleblowing Policy is here; or

• Alternatively, colleagues can raise their concerns, in confidence and directly to the Executive, through the “Speak in Confidence”, which is an online service, and concerns can be logged here.

Any accusations of tax evasion or its facilitation will be thoroughly investigated and, if found to be true, will result in disciplinary action being taken against those involved and, in some cases, may lead to dismissal.

Where a third party is involved, the Society may terminate its relationship with those individuals and organisations working on our behalf if they breach this policy.

Any accusations of tax evasion found to be malicious could result in disciplinary action being taken against those making the false allegations.

The Society may refer cases of tax evasion to the police or other relevant authority, regardless of any person’s relationship with the Society, their position, or their length of service. This could result in criminal sanctions against those involved.

Colleagues should not be afraid to report genuine suspicions of tax evasion. The Public Interest Disclosure Act 1998 protects employees who have reasonable concerns, and they will not suffer discrimination or victimisation for following the correct procedures.

 

Potential Risk Scenarios: “Red Flags”  

 

The following is a list of example red flags and which may raise concerns related to tax evasion. The list is not intended to be exhaustive and is for illustrative purposes only.

If a colleague encounters any of these red flags while working for the Society, they must report them promptly in accordance with this policy.

(a)  A colleague becomes aware, in the course of their work, that a third party has made or intends to make a false statement relating to tax, has failed to disclose income or gains to, or to register with, HMRC, has delivered or intends to deliver a false document relating to tax, or has set up or intends to set up a structure to try to hide income, gains or assets from a tax authority;

(b)  A colleague becomes aware, in the course of their work, that a third party has deliberately failed to register for VAT (or the equivalent tax in any relevant non-UK jurisdiction) or failed to account for VAT;

(c)  a third party requests payment in cash and/or refuses to sign a formal commission or fee agreement, or to provide an invoice or receipt for a payment made;

(d)  A colleague becomes aware, in the course of their work, that a colleague asks to be treated as a self-employed contractor, but without any material changes to their working conditions;

(e)  a supplier or other subcontractor is paid gross when they should have been paid net;

(f)  a third party requests that payment is made to a country or geographic location different from where the third party resides or conducts business;

(g)  a third party to whom the Society has provided services requests that their invoice is addressed to a different entity, when the Society did not provide services to such entity directly;

(h)  a third party to whom the Society has provided services asks the Society to change the description of services rendered on an invoice in a way that seems designed to obscure the nature of the services provided;

(i)  A colleague receives an invoice from a third party that appears to be non-standard or customised;

(j)  a third party insists on the use of side letters or refuses to put terms agreed in writing or asks for contracts or other documentation to be backdated;

(k)  A colleague notices that the Society has been invoiced for a commission or fee payment that appears too large or too small, given the service stated to have been provided;

(l)  a third party requests or requires the use of an agent, intermediary, consultant, distributor or supplier that is not typically used by or known to the Society;

(m)  a colleague in a travel branch becomes aware that another colleague has accepted a cash transaction for a holiday from a regular customer in excess of the relevant cash limit.  

 

Additional Support

If you have any questions regarding this policy or require additional support, you should speak to your line manager or the Society Secretary & Head of Governance. Alternatively, you can contact the HR advisor for your business group, or email HR.advice@midcounties.coop.