Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Due diligence definition

What does Due diligence mean? In legal practice, due diligence describes (1) compliance steps to prevent offences; and (2) pre‑transaction investigation in corporate and finance work. As a statutory defence to many strict‑liability and regulatory offences (for example under the UK Consumer Protection from Unfair Trading Regulations 2008 and the Food Safety Act 1990, and under Ireland’s Consumer Protection Act 2007 and food legislation), it requires the defendant to show that all reasonable precautions were taken and all due diligence was exercised to avoid the commission of the offence. Depending on the statute, this may place a legal or evidential burden on the defendant,...

UK failure to prevent tax evasion facilitation: due diligence for employees, agents and intermediaries—principles, procedures, screening and tools (Criminal Finances Act 2017)

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Practice notes

The Criminal Finances Act 2017 (CFA 2017) created a specific corporate offence for failing to stop the facilitation of tax evasion, effective from 30 September 2017. The government also published detailed guidance explaining what it expects from compliance frameworks and controls. This Practice Note draws on the finalised statutory provisions and the accompanying official guidance. That guidance should be considered, then approached and implemented on a proportionate, risk‑focused basis. This entails factoring in your organisation’s scale, character, structure and complexity. A small entity and a vast multinational may apply the principles quite differently: what is sensible for a low‑risk small business could be wholly unsuitable for a large enterprise operating in a high‑risk area, in practice.

The Law Society has likewise issued Criminal Finances Act 2017 guidance for law firms, which was approved by the chancellor on 21 November 2018. Per the Law Society, the chancellor regards its guidance as aligned with the Government’s guidance on the corporate offences of failing to prevent the criminal facilitation of tax evasion.

The offences and defence

There are two potential offences, dependent on whether the evaded tax is due in the UK or in another jurisdiction, as the context requires. Each offence has...

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Web page updated on 22/05/2026

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