Criminal Finances Act 2017

The UK Criminal Finances Bill has received Royal Assent. This new Act introduces several new criminal offences for corporate bodies that facilitate tax evasion, and changes to the proceeds of crime legislation. Of particular note is the creation of new offences for companies which fail to prevent their staff from facilitating tax evasion in the UK and abroad.

Hybrid Mismatch – Revised Guidance Published

On 31 March 2017, HMRC published revised draft guidance on the hybrid mismatch rules. These rules came into force for UK companies on 1 January 2017, but there is still considerable uncertainty over their scope and application. This is particularly the case in relation to "imported mismatch" legislation, which has been introduced into UK legislation in a manner that goes beyond the OECD's final Report on the subject, and in some circumstances can deny a UK tax deduction for interest paid to a foreign lender where there are hybrid features in the upstream financing structure. Unfortunately, the opportunity has not been taken to clear away uncertainties in this, and other, areas of the legislation.