HMRC has reportedly brought its first-ever corporate prosecution under the failure to prevent the facilitation of tax evasion offence, almost eight years after the legislation was introduced in the Criminal Finances Act 2017.
Bennett Verby Ltd, a Stockport-based accountancy firm, was reportedly charged with the failure to prevent offence in connection with an alleged R&D credits repayment fraud. We understand that six individuals, including one of the firm's former directors, were also charged with offences including cheating the public revenue and money laundering. All appeared in Manchester Crown Court on 7 August 2025 but did not enter pleas, and a provisional trial date has been set, with the trial due to start on 27 September 2027.
The prosecution represents a major milestone for HMRC, which has faced sustained criticism for failing to use the new offence created to crack down on tax evasion.
The offence: Corporate failure to prevent facilitation of tax evasion
Part 3 of the Criminal Finances Act 2017 introduced two corporate offences:
- Section 45: Failure to prevent the facilitation of UK tax evasion
- Section 46: Failure to prevent the facilitation of foreign tax evasion (with a UK nexus)
Both offences apply to companies, other bodies corporate, and partnerships. They impose strict liability where an associated person (e.g. employee, agent, contractor) criminally facilitates tax evasion and the organisation has failed to implement reasonable procedures to prevent that facilitation.
Crucially, there is no need to prove intent or awareness by senior management. Upon conviction, companies face unlimited fines. The offences were designed to emulate the “failure to prevent” model in the Bribery Act 2010 and strengthen corporate accountability in relation to tax evasion.
Eight years, no charges – Until now
The charges follow years of pressure on HMRC to act. A 2024 investigation by the Bureau of Investigative Journalism (TBIJ) and The Observer revealed that, despite over 100 cases being reviewed since 2017, no prosecutions had been brought under the legislation.
That inaction led campaigners and parliamentarians to describe the law as a “paper tiger”, with Margaret Hodge MP calling the failure to prosecute “appalling”.
Joe Powell MP, chair of the APPG on Anti-Corruption and Responsible Tax, was reported by TBIJ as saying: “[a] deterrent will only succeed in curbing criminal behaviour if it’s actually enacted, so it’s great to see HMRC now using this powerful tool.”
Fariya Mohiuddin, deputy director of external affairs at Tax Justice UK, added: “[u]nless HMRC gets more funding and resource, they will continue to underutilise the powers available to them and fail to investigate and enforce the law.”
Why has enforcement lagged?
Enforcement has proven challenging, for reasons including:
- Evidential complexity – Prosecutors must prove criminal tax evasion and its criminal facilitation, as well as addressing the corporate failure to prevent the facilitation.
- High-stakes litigation – Companies and professional services firms are often well resourced and can be expected to defend charges robustly, making prosecutions lengthy and costly.
- Civil enforcement preference – HMRC has historically focused on recovering revenue via civil routes rather than pursuing criminal enforcement.
As of December 2024, HMRC had 11 live investigations and 28 additional “opportunities” under review. Some investigations had yielded other enforcement outcomes, but until now, no FTPFTE charge had reached court.
Why this case matters
While significant as the first-ever use of the offence, Bennett Verby is not the sort of high-profile corporate name many expected HMRC to target for an early test case. In that context, it may be that the agency is seeking to secure a win before moving on to larger or more complex targets.
Nevertheless, the prosecution sends important signals:
- The offence is active, not dormant, and prosecution remains a live risk.
- HMRC is prepared to test the legislation in court rather than rely solely on its deterrent effect.
- HMRC is prepared to use the tools available to it, particularly in areas where they have material concerns of the tax system being abused (as is the case for R&D tax credits)
This prosecution lands amid a wider shift toward more assertive enforcement in the UK:
- The new failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act 2023 will come into force in September 2025, applying strict liability to large organisations.
- Companies House is implementing new powers to verify identities, reject suspicious filings, and investigate shell structures.
- The Insolvency Service has been given, and plans to use, more economic crime enforcement powers.
- The Serious Fraud Office (SFO) has vowed to “go hunting” with its new tools, including under the expanded failure to prevent regime.
Against that backdrop, HMRC’s decision to prosecute under the FTPFTE offence may reflect both external pressure and a broader policy recalibration.
What it means for businesses
Any organisation with UK operations – particularly in accountancy, law, financial services or tax advisory – should view this case as a clear signal to:
- Revisit their prevention procedures – Are they tailored to today’s risks and operating reality?
- Enhance training and oversight – Especially for staff and third parties involved in tax compliance or structuring.
- Document and evidence compliance – The statutory defence rests on demonstrating reasonable procedures.
- Align “tax evasion facilitation” prevention with wider economic crime efforts, including anti-bribery and anti-fraud controls.
With this first prosecution now live, businesses can no longer assume the offence is dormant. Whether this marks a new era of enforcement or remains an isolated case will depend on HMRC’s willingness and capacity to pursue and as appropriate prosecute the many other investigations reportedly underway.
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