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Money laundering - under-paying tax |
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Do money laundering reporting officers have to notify the authorities of
their suspicions that funds may include ‘sums of unpaid, or underpaid’
tax? The CA has held that it does – even if the money comes from a
legitimate trading business.
In Gabriel [2006] a judge at first instance held that the proceeds of
legitimate trading did not constitute criminal property, and so there was
no need for a money laundering report. In essence, a distinction was
drawn in respect of underpayment of tax by a legitimate business (eg the
corner shop that pockets part of its receipts as cash, and does not
declare them). However, that distinction has now been quashed by the
CA which has held that anyone that cheats the Revenue is ‘obtaining a
pecuniary advantage’, and thus there is criminal conduct within s340(2)
POCA 2002. Accordingly, if ever you handle money from a client’s
business, and you have suspicions that the business is not declaring
100% of all its taxes, then you are obliged to make a report. R v K [2007]
EWCA Crim 491, noted in [2007] LSG 21 June 1. © Practical Lawyer
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July 2007 |
