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.
The End is Nigh for the Non-Dom Regime
Published in ThoughtLeaders4 Private Client Magazine, Helen McGhee expert analysis of the current state of non-dom tax regime and it's future.
HMRC Makes Changes to COP9
On 14 June 2023, HMRC published a substantially rewritten Code of Practice 9 (“COP9”). Helen McGhee and Megan Durnford set out the key changes implemented as a result of this publication.
Pandora Papers: HMRC issues nudge letters
The Pandora Papers leak of almost 12m documents back in 2021 purportedly exposed the secret accounts and dealings (including potential tax evasion/ avoidance and money laundering) of 35 world leaders (including the late HM Elizabeth II), as well as many politicians and billionaires. The data was obtained by the International Consortium of Investigative Journalists in Washington DC and led to one of the biggest ever global financial investigations.
Increased Investment in Personal Tax Compliance in the UK (Published in Thought Leaders 4 Private Client)
Advances in technology and increased international fiscal co-operation have made global personal tax compliance initiatives pop up in abundance in recent years. To compound the issue, the Russian invasion of Ukraine and the corresponding economic fallout prompted domestic governments to increase transparency in relation to investments held by wealthy foreign individuals (with a focus on oligarchs).
In the UK, in the context of the cost-of-living crisis, public opinion certainly seems to be in favour of increased accountability for high-net-worth individuals (eg, on 9 October 2022, 63% of Britons surveyed thought that “the rich are not paying enough and their taxes should be increased”).1
HMRC is one of the most sophisticated tax collection authorities in the world and the department is making significant investments in technology in the field of compliance work; they are well placed to take advantage of new international efforts to increase tax compliance, particularly considering the already extensive network of 130 bilateral tax treaties in the UK (the largest in the world).2 The UK was also a founding member of the OECD’s Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) forum.
This article discusses the main developments in support of the increased focus on international transparency and personal tax compliance in the UK. There are other international fiscal initiatives, particularly in the field of corporate taxation, but such initiatives are beyond the scope of this article.
It should be noted that a somewhat piecemeal approach, with constant tinkering makes compliance difficult for the taxpayer and is often criticised for lacking the certainty that a stable tax system needs to thrive.
This article was first published with ThoughtLeaders4 Private Client Magazine
Tax-Related Measures in the Autumn Statement 2022
On 17 November 2022, the Rt Hon Jeremy Hunt MP, the Chancellor of the Exchequer, unveiled the contents of the Autumn Budget 2022. This comes after the International Monetary Fund (IMF) published its world economic forecast on 11 October 2022. The IMF expects the British economy to grow 3.6% in 2022 and 0.3% in 2023. Other major developed economies are also expected to stagnate next year, namely Spain (1.2%), the US (1.0%), France (0.7%), Italy (-0.2%) and Germany (-0.3%).
This note focuses on tax measures included as part of that statement.