Our anti criminal finance policy

1. Introduction

1.1    The Criminal Finances Act 2017 came into force on 30 September 2017. As of that date, corporate bodies and partnerships are criminally liable if they fail to prevent tax evasion by either a member of their staff or an external agent, even where the business was not involved in the act or was unaware of it. The Act has similarities with the Bribery Act 2010.

1.2    VisitScotland is committed to ensuring that it puts in place processes and systems that minimise the risk of tax evasion facilitation.

1.3    The Criminal Finances Act 2017 (“CFA”) does not place a legal requirement on organisations such as VisitScotland to publish a statement of the steps taken to mitigate the risk of tax evasion facilitation taking place in its organisation, however VisitScotland does not condone and has a zero tolerance approach to the facilitation of tax evasion and therefore we have prepared this statement.

3. Responsibility for this policy

3.1    The Board has overall responsibility for ensuring this policy complies with our legal and ethical obligations, and that all those under our control comply with it.

3.2    The Head of Financial Services has primary and day-to-day responsibility for implementing this policy, monitoring its use and effectiveness, dealing with any queries about it, and reviewing internal control systems and procedures to ensure they are effective in preventing the facilitation of tax evasion.

3.3    Directors and Heads of Department are responsible for ensuring those reporting to them understand and comply with this policy and are given adequate and regular training on it.

3.4    While only a legal entity can commit an offence under the Act, all employees have a responsibility towards ensuring that we can recognise suspicious financial activity and act accordingly.

4. Definitions

4.1    For the purposes of this policy:

(a)    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;

(b)    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;

(c)    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;

(d)    Associated person means an employee of the corporate entity or partnership; an agent of the corporate entity or partnership; or any such person who performs services for or on behalf of the corporate entity or partnership.

(e)    Third party means any individual or organisation an employee comes into contact with during their work for us. It includes actual and potential clients, customers, suppliers, distributors, business contacts, agents, advisers, and government and public bodies, including their advisers, representatives and officials, politicians and political parties.

4.2    Under the CFA, a separate criminal offence is automatically committed by a corporate entity when the tax evasion is facilitated by a person acting in the capacity of that body.

For the offence to be committed, the associated person must deliberately and dishonestly take action to facilitate the tax evasion by the taxpayer. If the associated person accidentally, ignorantly, or negligently facilitates the tax evasion, then the corporate offence will not have been committed. The organisation does not have to have deliberately or dishonestly facilitated the tax evasion itself; the fact that the associated person has done so creates the liability for the organisation.

4.3    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). In this policy, all references to tax also includes national insurance contributions (and their equivalents in any non-UK jurisdiction).

5. How to identify possible tax evasion

The following is a list of possible red flags that may arise during your work and which may raise concerns. The list is not intended to be exhaustive and is for illustrative purposes only. If there is a situation not listed which an employee is concerned about, they are expected to speak to their line manager.

If an employee encounters any of these red flags while working for us, an employee must report them promptly to their manager, those listed in 7.2 OR use the procedure set out in the Whistleblowing Policy:

(a)    an employee becomes aware, that someone has made or intends to make a false statement relating to tax, has not disclosed income or is not registered with HMRC (or the equivalent tax authority outside UK).

(b)    They may have given or intend to give a false document relating to tax, or have set up or intend to set up a structure to try to hide income or assets from a tax authority;

(c)    an employee become aware, that someone has deliberately failed to account for or register for VAT (or the equivalent tax outside UK);

(d)    someone asks an employee for payment in cash and / or refuses to sign a contract, or cannot provide an invoice or receipt for a payment made;

(e)    an employee becomes aware, that someone working for us asks to be treated as a self-employed contractor, but without any material changes to their working conditions;

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

(g)    someone requests that payment is made to a country or geographic location different from where they reside or do business;

(h)    someone who has provided services requests that their invoice is addressed to a someone else who has not been involved in the provision of those services;

(i)    someone to whom we have provided services asks us to change the description of services on an invoice in a way that seems designed to hide the nature of the services provided;

(j)    an employee receives an invoice from a third-party that appears to be non-standard or customised;

(k)    someone 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;

(l)    an employee notices that we have been invoiced for a fee payment that appears too large or too small, given the service stated to have been provided;

(m)    someone requires the use of an agent, intermediary, consultant, distributor or supplier that is not typically used by or known to us;

(n)    someone asks an employee to pay them via an offshore bank without good reason.

7. Employee responsibilities

7.1    An employee must ensure that they read, understand and comply with this policy. The prevention, detection and reporting of tax evasion and foreign tax evasion are the responsibility of all those working for us or under our control. Employees are required to avoid any activity that might lead to, or suggest, a breach of this policy.

7.2    An employee must notify their manager, Head of Finance, Head of Procurement, Legal Counsel or Director of Corporate Services as soon as possible if an employee believes or suspects that a conflict with this policy has occurred or may occur in the future.

9. Training and communication

9.1    We will ensure that the relevant staff are made aware of this policy and training on this policy is offered to those employees and associated persons who have been identified as being at risk of exposure to criminal tax evasion. Regular training may form part of wider budget holder training.

9.2    Our zero-tolerance approach to tax evasion and foreign 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.

11. Monitoring & review

This policy will be reviewed every three years or upon changes in legislation. The policy will be reviewed by the Audit &Risk Committee and approved by the VisitScotland Board.