The SFO Handbook on Corporate Cooperation Guidance
Last week, the Serious Fraud Office (SFO) published a handbook on what it expects from organisations seeking cooperation credit in an investigation. This is the first time the SFO has formally set out written guidance to clarify how they will assess cooperation and, as such, is a key reference source for any company navigating its way through an investigation or seeking to negotiate a settlement with the SFO.
Cooperation is defined as “providing assistance to the SFO that goes above and beyond what the law requires”. Examples of this include:
· identifying suspected wrongdoing and criminal conduct together with the people responsible;
· reporting to the SFO within a reasonable time of the suspicions coming to light; and
· preserving available evidence and providing it promptly in an evidentially sound format.
Extensive guidance is given in the handbook on preserving and providing material to the SFO, the SFO’s aim being to ensure corporations collect all relevant evidence, maintain its integrity, and present it a way that facilitates the SFO’s ability to review it. Additionally, the SFO also encourages corporations to alert them to, and even provide them with, ‘material that the organisation cannot reach’ such as private or third-party emails and bank accounts. If corporations have such information and it is relevant, then they should, as a matter of course, seek legal advice on the sharing of personal data and data privacy.
Regarding industry and background information, the handbook suggests that corporations who ‘identify potential defences that are particular to the market or industry at issue’ would be deemed cooperative. However, the SFO’s appeal for the provision of information on ‘other actors in the relevant market’ could violate confidentiality clauses or result in questions as to how and why such data was obtained. Again, legal advice should be sought as a matter of course before providing disclosure on third-parties.
The guidance strongly encourages companies to consult the SFO before any individuals are interviewed or any action taken. Depending on the size and nature of the corporation and the issue at hand, this approach could prove difficult for companies to do while maintaining their business operations. This is only guidance; there is scope to discuss and negotiate with the SFO to ensure that commercial operations can continue as uninterrupted as possible.
Finally, the guidance emphasises that corporations should waive legal privilege on notes and transcripts of witness interviews to be deemed genuinely cooperative, with the handbook stating that if a corporation does not waive privilege, it could impact their eligibility for a Deferred Prosecution Agreement. However, corporations and their counsel will no doubt continue to battle with the SFO over access to such materials on the basis of legal privilege.
Despite all the examples of cooperation provided in the handbook, there is no guarantee that if a company follows them that this conduct will be taken into account in an investigation. Indeed, the handbook provides no examples of any actual benefits that cooperation could bring to a corporation. As such, while the report is useful in making clear what the SFO expects, it is not necessarily incentivising to ensure these expectations are met.
An Assessment to Tax is never ‘stale’, but it might be out of date: HMRC v Tooth
This article briefly discusses the key points arising out of the decision of the UK Supreme Court in HMRC v Tooth  UKSC 17. The case considered (1) whether a discovery assessment could become “stale” and (2) the meaning of the phrase “deliberate inaccuracy”.
VATA 1994 s.47, Agency, Onward Supply Relief, & Double Taxation
On 12 July 2021, the First-tier Tribunal (Tax Chamber) (“FTT”) released its decision in Scanwell Logistics (UK) Limited v HMRC  UKFTT 261 (TC), rejecting the taxpayer’s claim for onward supply relief (“OSR”).
Whilst OSR is now limited, post-Brexit, to goods imported into Northern Ireland for onward supply to the EU, the FTT’s discussion of agency under section 47 of the Value Added Tax Act 1994 (“VATA”) is of broader interest.
The case serves as a reminder of the significant financial consequences that can result from errors in tax planning, as Scanwell was ultimately held liable for £5.7 million in unpaid import VAT despite the fact that the imported goods almost immediately left the UK (which, if properly planned, could have meant Scanwell was relieved from liability to import VAT).
Draft Finance Bill 2022—tax avoidance measures
Helen McGhee, senior associate at Joseph Hage Aaronson LLP, considers the draft Finance Bill 2022 clauses published on 20 July 2021 in relation to tax avoidance and recent updates to the tax avoidance regime.
Getting Closer: A Global Minimum Tax on Corporations
On 1 July 2021, US Treasury Secretary Janet Yellen announced that countries representing over 90% of global GDP had agreed to a global minimum tax on corporations (“GMCT”). The GMCT seeks to put a floor on tax competition on corporate income through the introduction of a minimum corporate tax of at least 15%. Whilst certain elements give rise to positive expectations, some caveats should be noted. Much will depend on (1) the outcome of future political negotiations and (2) the detail of the drafting at international and national levels.
The DBKAG & K (CJEU) decision: an opportunity for investment funds?
On 17 June 2021, the European Court decided the joint cases K (C-58/20) and DBKAG (C-59/20) regarding whether the supply of certain services constituted the “management of special investment funds”, benefiting from the VAT exemption enshrined in Article 135(1)(g) of Council Directive 2006/112/EC.