Key Takeaways
- The United Kingdom will prosecute its first case under the corporate criminal offense of failing to prevent the facilitation of tax evasion in September 2027, targeting accounting firm Bennett Verby.
- Prior to this, HMRC reviewed over 100 companies under the 2017 failure‑to‑prevent provision but found no sufficient evidence to charge anyone.
- Section 250 of the Crime and Policing Act 2026, effective 29 June 2026, creates a broader corporate criminal liability rule: a corporation can be held liable for any offence committed by a senior manager acting within actual or apparent authority, with no defence of reasonable prevention measures.
- Unlike the earlier failure‑to‑prevent offences (which require a benefit to the organisation and allow a compliance‑programme defence), Section 250 applies to all crimes, has no size or benefit thresholds, and repeals the senior‑manager provisions of the Economic Crime and Corporate Transparency Act 2023.
- “Senior manager” is defined by role and influence rather than title, using a facts‑and‑circumstances test akin to the Corporate Manslaughter and Corporate Homicide Act 2007.
- The new rule removes the reasonable‑prevention‑procedures defence, signalling a shift from encouraging preventative culture to pursuing prosecution, and raises compliance implications for organisations that must now scrutinise decision‑making chains more closely.
Background on the Bennett Verby Case
In September 2027 the UK is set to bring its first prosecution under the corporate criminal offence of failing to prevent the facilitation of tax evasion. The defendant is accounting firm Bennett Verby, accused of facilitating a research‑and‑development repayment fraud. The Bureau of Investigative Journalism first reported the allegations, marking a notable milestone after years of preparatory work by HMRC.
Historical Context of Failure‑to‑Prevent Offences
The failure‑to‑prevent facilitation of tax evasion offence was introduced in September 2017. Despite HMRC reviewing more than 100 companies over the ensuing years, no charges were brought because investigators did not believe they had a viable case. The government’s broader anti‑economic‑crime agenda, however, continued to expand, adding offences such as failure to prevent bribery and failure to prevent fraud.
Expansion of Corporate Criminal Liability
In recent years the UK has rolled out a suite of corporate criminal offences, each targeting a different facet of misconduct. The Economic Crime and Corporate Transparency Act 2023 introduced liability for economic offences committed by senior managers acting under actual or apparent authority. Section 250 of the Crime and Policing Act 2026 builds on this foundation but widens the scope dramatically: it applies to any criminal offence, not merely economic ones.
What Section 250 States
Section 250 provides that where a senior manager of a body corporate or partnership, acting within the actual or apparent scope of their authority, commits an offence under the law of England and Wales, Scotland or Northern Ireland, the organisation also commits the offence. The only exceptions are when the conduct occurs wholly outside the UK and the organisation would not be liable if it had performed the act itself. This language removes the need to prove a benefit to the company or to show a failure of preventive measures.
Definitions Relevant to Section 250
The Act clarifies key terms: a “body corporate” includes entities incorporated inside or outside the UK, excluding corporation soles and partnerships not regarded as bodies corporate under their governing law. “Partnership” covers traditional partnerships, limited partnerships, and analogous foreign entities. A “senior manager” is anyone who plays a significant role in deciding how the whole or a substantial part of the organisation’s activities are managed or organised, or who actually manages or organises those activities. This definition mirrors that used in the Corporate Manslaughter and Corporate Homicide Act 2007 and focuses on influence rather than formal title.
How the Senior‑Manager Test Works in Practice
Government guidance emphasizes a facts‑and‑circumstances approach: prosecutors will examine an individual’s managerial influence, responsibilities, and role in decision‑making for the organisation or a significant part of it. This shift aims to capture modern corporate structures where authority is dispersed across functions, ensuring that those who truly steer the business cannot hide behind titles.
Scope of Authority: Actual vs. Apparent
For liability to attach, the senior manager’s act must be within their actual or apparent scope of authority. Legislative notes explain that this inquiry looks at whether the conduct resembles the types of acts the manager is authorised to perform, or whether it is what a person in that position would normally be expected to do. This test prevents liability for wholly unrelated personal misconduct while still reaching acts that flow naturally from the manager’s role.
Corporate Body or Partnership Definition
Section 250’s definition of a corporate body or partnership is deliberately broad, encompassing entities incorporated anywhere in the world. Importantly, the provision imposes no monetary or employee thresholds, unlike the failure‑to‑prevent fraud offence, which applies only to large organisations meeting specific turnover, asset, and headcount criteria. Consequently, even small or mid‑sized firms can fall under Section 250’s reach.
Contrast with Failure‑to‑Prevent Offences
The failure‑to‑prevent facilitation of tax evasion offence requires that an associated person’s fraudulent act be intended to benefit the organisation and allows a defence if the company had reasonable prevention procedures in place. Section 250, by contrast, establishes liability through direct attribution of a senior manager’s conduct, irrespective of benefit to the company, and expressly does not permit a reasonable‑prevention‑procedures defence. This represents a significant policy shift from encouraging compliance to emphasising accountability.
Implications for Tax Professionals and Businesses
Tax advisers must now assess whether senior managers’ actions—potentially unrelated to tax matters—could trigger corporate liability under Section 250. The removal of the compliance‑programme defence means that merely having policies and training is insufficient; organisations must ensure that senior managers lack the actual or apparent authority to commit offences, or that robust monitoring prevents such conduct. Companies may need to re‑examine delegation structures, decision‑making logs, and oversight mechanisms to mitigate risk.
Current Prosecution Landscape
As of mid‑2025, HMRC was pursuing 13 live investigations of the failure‑to‑prevent facilitation of tax evasion offence, with 27 additional potential cases under review, and had rejected 136 prior referrals. These numbers have remained relatively stable since the end of 2024. HMRC maintains that the legislation’s purpose is to drive behavioural change and encourage preventative measures, but the advent of Section 250 signals a heightened appetite for actual prosecutions, potentially altering the balance between prevention and punishment.
Looking Ahead
Section 250 is poised to reshape UK corporate criminal law by lowering the barriers to holding organisations liable for the acts of their senior leaders. While the government frames the rule as a tool to capture noneconomic crimes where traditional doctrines falter, businesses must adapt quickly to an environment where compliance programmes alone no longer shield them from criminal liability. Monitoring senior‑manager authority, clarifying decision‑making chains, and preparing for potential unlimited fines will become essential components of risk management in the post‑2026 regulatory landscape.