Eye on economic crime: HMRC brings forward first corporate prosecution under failure to prevent tax evasion offence

On 11 August 2025, HM Revenue & Customs ("HMRC") initiated its first corporate prosecution under the failure to prevent the facilitation of tax evasion offence, which was introduced by the Criminal Finances Act 2017.  Bennett Verby Ltd, a Stockport-based accountancy firm, and six individuals, including a former director, were charged in connection with an alleged research and development ("R&D") tax credit repayment fraud.

This landmark CCO prosecution alongside the incoming failure to prevent fraud offence puts corporate criminal offences (i.e. the "failure to prevent" offences) under the spotlight.  It remains to be seen if this case will open the floodgates for other CCO prosecutions to be initiated by HMRC.  However, this case provides a timely reminder for companies to review and refresh their reasonable prevention procedures, including revisiting past risk assessments, training employees and associated persons, and monitoring the effectiveness of existing controls.

Corporate Criminal Offences: a recap

The Criminal Finances Act 2017 introduced two corporate offences:

• Section 45: failure to prevent the facilitation of UK tax evasion; and
• Section 46: failure to prevent the facilitation of foreign tax evasion (together, the "CCOs").

These strict liability offences apply to companies, other corporate bodies, and partnerships where an associated person (such as an employee, agent or contractor) acting for or on behalf of a relevant body facilitates tax evasion. The only defence to the CCOs is for an organisation to have in place reasonable prevention procedures to prevent the facilitation of tax evasion.¹  HMRC guidance states that reasonable prevention procedures should be developed on the basis of the following principles: top level commitment, risk assessment, proportionate risk-based prevention procedures, due diligence, communication (including training), monitoring and review.²

A 'paper tiger' no more

In 2024, Dame Margaret Hodge MP, now the UK Government's anti-corruption champion, declared that the law was a "paper tiger" amid reporting at the time that found that no prosecutions had been brought under the CCOs, notwithstanding around 100 cases having been reviewed at the time.³  More recent data indicates that, as of 31 December 2024, HMRC had reviewed and rejected 114 cases, and had 11 live CCO investigations as well as 28 live opportunities under review.⁴

This landmark case shifts the narrative and demonstrates that HMRC is willing to bring forward prosecutions under the CCOs in practice.  In this instance, Bennett Verby Ltd has been charged with a Section 45 offence in connection with alleged R&D credits repayment fraud involving a company director and certain other individuals.  The defendants appeared in Manchester Crown Court on 7 August 2025 with a provisional trial date set for 27 September 2027.

An evolving enforcement landscape

This prosecution comes amid a number of broader developments in the UK corporate enforcement context.  Among other things:

• The new failure to prevent fraud offence comes into force on 1 September 2025 under the Economic Crime and Corporate Transparency Act 2023.⁵
• In March 2025, the SFO announced a new taskforce alongside regulatory agencies in France and Switzerland affirming a shared commitment to tackling national and international bribery and corruption.⁶
• In April 2025, the SFO launched new guidance for corporates on self-reporting, cooperation and DPAs. Among other things, the new guidance states that, if a corporate self-reports suspected wrongdoing and co-operates fully with investigators, it can expect to be invited to negotiate a DPA rather than face prosecution, unless exceptional circumstances apply.⁷
• The SFO's 2025/26 business plan places an emphasis on the incoming failure to prevent fraud offence and whistleblower incentivisation reform.⁸
• In August 2025, the SFO and CPS published joint Corporate Prosecution Guidance, which sets out both prosecuting bodies' common approach to corporate offending.⁹

Nick Ephgrave, Director of the SFO, has publicly stated that he wants the SFO to "go hunting" for cases. The latest HMRC statistics and this landmark CCO prosecution suggests that HMRC may be shifting gear with respect to its enforcement of the CCOs with a similarly proactive enforcement posture.

Key Takeaways

The initiation of this landmark CCO prosecution alongside the incoming failure to prevent fraud offence puts corporate criminal offences (i.e. the "failure to prevent" offences) under the spotlight.  It remains to be seen if this case will open the floodgates for other CCO prosecutions to be initiated by HMRC.  In any event, this case provides a timely reminder for companies to review and refresh their reasonable prevention procedures, including revisiting past risk assessments, training employees and associated persons, and monitoring the effectiveness of existing controls.  The Mayer Brown team continues to monitor key developments related to this case.