PREVENTION OF CRIMINAL FACILITATION OF TAX EVASION POLICY
Wrekin Products Ltd. and its parent company Wrekin Holdings Limited (together, the "Group", and individually each a "Group Company") are committed to the prevention, deterrence and detection of criminal tax evasion and the criminal facilitation of tax evasion. This document sets out the Group's policy for preventing the criminal facilitation of tax evasion (the "Policy") and the standards and procedures required to ensure compliance with the Policy.
On 30th September 2017 the Criminal Finances Act 2017 (the "Act") came into force, to demonstrate the UK Government’s commitment to preventing tax evasion in all its forms. The UK government believes that companies and partnerships should be criminally liable where they fail to prevent those who act for them, or on their behalf, from criminally facilitating tax evasion. As a result, it has created a new corporate criminal offence of failing to prevent the facilitation of tax evasion. A Group Company could face prosecution under the Act if it fails to have in place reasonable procedures to prevent the facilitation of tax evasion. There are serious criminal penalties for committing an offence under the Act. Additionally, conviction could have serious consequences for the Group's reputation and business relationships.
The Group does not tolerate tax evasion or the criminal facilitation of tax evasion within its business and we expect our officers, employees and those providing services to, for or on behalf of the Group (our "Associates") to conduct themselves in accordance with this Policy. The Group will actively investigate all breaches or suspected breaches of this Policy and, if appropriate, invoke disciplinary measures against any employee found to be involved in the criminal facilitation of tax evasion and take prompt action to remedy and/or report the matters giving rise to the breach and prevent any repetition. In appropriate circumstances, the Group will also invoke contractual sanctions against any Associate who is found to have criminally facilitated tax evasion.
In general terms, the criminal offence of tax evasion is committed where a person (known here as ‘A’) knowingly takes steps to fraudulently reduce the amount of tax that they should otherwise have paid. A person (‘B’) commits the criminal offence of facilitation of fraudulent tax evasion if they are deliberately and dishonestly concerned in, or take steps with a view to, assisting A to fraudulently evade tax. Both A and B will have committed a criminal offence under existing UK law. The new criminal offence means that The Group may also have committed an offence if B criminally facilitated the tax evasion while acting in their capacity as an associate of The Group.
- the person who knowingly facilitates tax evasion can be as guilty as the person who evades the tax;
The Group may still be guilty of an offence under UK law even if the facilitation activity is committed overseas and, if UK tax is evaded, irrespective of whether it would be illegal under local law;
if the facilitation activity takes place in the UK or concerns a UK company, branch, person or other entity, the offence will in certain circumstances extend to cover the evasion of tax in jurisdictions other than the UK;
- fraudulent tax evasion and the deliberate and dishonest facilitation of fraudulent tax evasion are criminal offences and The Group will, in appropriate circumstances, bring any such activity that it identifies to the attention of the relevant authorities.
Further information on the scope of the offence and the main areas of risk is available from the Company Secretary of the Group.
The Group is committed to the prevention of the criminal facilitation of tax evasion in the workplace and in all its business dealings. The Group will not tolerate any form of criminal facilitation of tax evasion by any director, employee or third party dealing with the Group, including contractors, consultants, agency workers, agents and service providers. This Policy applies in relation to business dealings and transactions in all jurisdictions in which the Group operates.
No employee or Associate of the Group should feel pressured into offering or agreeing to provide assistance to enable another person to unlawfully evade tax in order to secure business on behalf of or with the Group and no employee or Associate will suffer adverse consequences in their dealings with the Group for refusing to agree to facilitate tax evasion or for taking steps to report any concerns that an offence has been committed.
All employees and Associates must ensure that they are familiar with the aims and objectives of this Policy and must act in accordance with it. Breaches of this Policy are regarded seriously by the Group and may result in disciplinary action or the Group seeking appropriate contractual or other remedies.
The Group’s directors ("the Board") are fully committed to implementing the Policy and ensuring that the Group's business relationships are conducted in accordance with its terms. The Group’s Company Secretary, has been appointed to review and oversee the operation of the Policy and to report to the Board in relation to this in order to ensure that the Policy is effective in addressing the risk of criminal facilitation by employees and associates of the Group. In order to ensure day to day compliance with the Policy and ongoing monitoring and to allow for effective reporting of any concerns, Melanie Kinsey has been appointed as the Group's Compliance Manager. Details on how you can report any concerns that you may have are set out below.
Scope of the policy
The Policy applies to all directors and employees of the Group. Appendix I to the Policy sets out how the Policy applies to directors and employees in these circumstances. We will also encourage the application of this Policy amongst our business partners, including joint venture partners not within the scope set out above.
The Group also requires third party Associates (such as agents, contractors, suppliers, distributors intermediaries) to be aware of this Policy and to act in a way that is consistent with this Policy or any equivalent policy that they themselves may have. Appendix II to the Policy sets out how the Policy applies in these circumstances.
Policy for Employees and Directors
1. Application of Policy to Employees
The Group has conducted a thorough risk assessment of all aspects of its business and operations of the Group and has identified the following areas as vulnerable to allegations of the criminal facilitation of tax evasion:
- Employees dealing with external third parties; Employees responsible for procurement, signing contracts and producing / settling invoices;
- Employees in specific finance / accounting / legal / tax planning / business structuring roles
- Employees engaged in dealings with third party Associates (as defined below)
For more on each of these, see below. This list is not exhaustive and all staff should be mindful of the general anti-facilitation of tax evasion principle underpinning this Policy in all of their conduct and dealings on behalf of the Group. This risk assessment will be repeated periodically and this section of the Policy will be updated accordingly in the light of any change of circumstances.
1.1 Employees dealing with external third parties
No employee or director should provide any service or take any action in relation to customers or other third parties which they believe will be used to facilitate a tax fraud. You should keep in mind the possibility that third parties will seek to use services provided by the Group or transact with the Group in a particular way for the purposes of the fraudulent evasion of taxes and you should take personal responsibility for ensuring that you do not knowingly facilitate this activity. Examples of such facilitation might include (but are not limited to):
- referring a client on to a third party with the express intention of assisting the client to evade tax; and
- agreeing to support a particular transaction or activity (e.g. accepting payments evade tax; and
- agreeing to support a particular transaction or activity (e.g. accepting payments, entering into contractual arrangements or invoicing) in the knowledge that the client is using that support to facilitate their fraudulent evasion of tax.
You should be aware of particular risks when dealing with individuals from low tax transparency jurisdictions, and should also consider requests carefully when they involve the unexplained use of intermediaries or entities other than the customer with which you are dealing or unusual requests for assistance that are not within your day-to-day remit or in accordance with normal practice for dealing with a customer of that type.
If you receive a request for assistance in circumstances where you know or suspect that the customer or third party intends to use that assistance to enable them to fraudulently evade tax you should:
- resist responding to the request immediately and state that you will need to consult with your Line Manager;
- report the request to your Line Manager and the Compliance Manager with as much detail as possible to explain why you suspect that the assistance requested might be used to enable fraudulent tax evasion;
- take no further action and do not agree to the request unless instructed to do so by your Line Manager in circumstances where they have satisfied themselves that providing the assistance requested will not be in breach of this Policy;
- if the client makes repeated requests for assistance despite your refusal to comply, refer them to speak directly with your Line Manager.
If you are unsure whether or not responding to a particular request from a third party may put you at risk of breaching this Policy, you should speak to your Line Manager and the Compliance Manager before agreeing to action the request.
Employees responsible for procurement, signing contracts and producing/settling invoices
The Group’s risk assessment has identified that there are a number of ways in which employees involved in procurement, negotiating contracts and producing or settling invoices for customers or suppliers could be encouraged to become involved in the criminal facilitation of tax evasion, including, but not limited to, false invoicing schemes, fraudulent VAT transactions, employment, consultancy or agency arrangements designed to evade tax and artificial and contrived contracts and transactions.
The Group prohibits the involvement of its employees and other Associates in all such criminal activity and encourages all employees to be aware of this risk and to report any concerns that they may have that this Policy is being breached.
You should be mindful of the following factors that might indicate that a contractual arrangement or transaction is being used for the fraudulent evasion of tax:
- overly complex supply chains or ownership structures;
- requests to make or receive payments in cash rather than through an account with a recognised bank;
- requests to make or receive payments in a jurisdiction with which the other contracting party does not obviously have a connection, particularly those with a low tax transparency rating;
- high value, multijurisdictional transactions;
- transactions or invoices sent to non-UK-resident customers, particularly to those resident in jurisdictions with a low tax transparency rating;
- non face-to-face business relationships/transactions and contractual arrangements involving multiple third parties or intermediaries where the reason for this is unclear.
You should refuse any request from third parties to enter into contractual or invoicing arrangements where you know or suspect that the arrangements will be used to enable the fraudulent evasion of tax. You should report the request to your Line Manager and the Compliance Manager as soon as practicable giving as much detail as possible to enable them to make a record of the request and decide whether any further preventative action should be taken.
If you know or suspect that other individuals are providing assistance in breach of this Policy or you identify suspicious transactions or invoices that may be in breach of this Policy, you should speak to your Line Manager and the Compliance Manager as soon as possible.
Employees in specific finance/accounting/legal/tax planning/business structuring roles
The Group has identified that there is a particularly high risk that employees involved in specific roles within The Group, particularly in finance, accounting, legal and tax management, and business structuring may have the opportunity to engage in the criminal facilitation of tax evasion. The Group does not engage, and does not permit its employees to engage, in transactions that it knows or suspects will be used for the fraudulent evasion of tax. Legitimate tax planning, per se, is not a criminal offence, where there is no dishonesty fraud or intention to deliberately and unlawfully fail to pay tax when it is due.
However, aggressive tax planning schemes may be considered to be tax evasion in circumstances where an honest person would not consider that the proposed activity is legitimate and in compliance with the law.
You should be mindful of the following factors that might indicate that a proposed transaction or activity is being used for the fraudulent evasion of tax:
- highly complex tax planning arrangements;
- any requests to maintain the secrecy of a transaction, beyond the usual confidentiality associated with business arrangements;
- anonymous transactions or transactions with or arranged by individuals with whom you have not had a face-to-face relationship.
If you know or suspect that other individuals are breaching this Policy or you identify suspicious transactions that may be in breach of this Policy, you should speak to your Line Manager and the Compliance Manager as soon as possible.