Jurisdiction(s):
United Kingdom

HMRC brings first corporate failure-to-prevent tax evasion charge under the Criminal Finances Act 2017, testing 'reasonable procedures' and signalling tougher UK enforcement amid R&D repayment fraud crackdown

Published on: 18 August 2025

Published by a Law360 reporter

Legal News

Article summary

HMRC has charged a tax accountancy firm with the failure to prevent tax evasion in connection with an alleged fraud involving research and development repayments

HMRC has brought a case against a tax accountancy practice, alleging failure to prevent tax evasion linked to purported research and development repayment fraud. It marks the first occasion the authority has hauled a company before the courts over whether its tax evasion compliance programmes were adequate. Alongside the corporate action, six individuals have also been charged, among them a former director of the firm.

After criticism from lawmakers about limited enforcement, HMRC has deployed the offence, signalling a willingness to test the law in court rather than depend on its deterrent effect, according to Reuben Vandercruyssen of Hogan Lovells LLP. He said the matter indicates a tougher stance on financial crime, with HMRC opting to pursue prosecution rather than rely on deterrence.

HMRC has charged Bennett Verby Ltd, an accounting firm in northwest England, with alleged fraud, tax evasion and failing to prevent tax evasion. Six men are also accused of tax evasion and fraud offences. A trial is expected to begin in September 2027, a representative for HMRC said earlier in August 2025...

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