New tax evasion laws coming into force this week could catch UK companies unaware and put them at risk of unlimited fines, a British law firm has warned.
Blake Morgan said it fears that "many" commercial and non-profit firms alike may be unprepared for fresh regulations as part of the Criminal Finances Act 2017, which come into effect this Saturday.
The law firm said companies now need to prove they have "reasonable" policies and procedures in place that prevent their employees, agents and joint venture partners from facilitating tax evasion in the UK or abroad.
"This is vital if they are to avoid liability where their associated persons knowingly or deliberately and dishonestly assist another company or individual to commit tax evasion or aid and abet another person in doing so," Blake Morgan said.
The new laws not only affect British firms, but any foreign companies and partnerships with a UK connection.
Any organisation prosecuted under the Act risks facing "unlimited fines, as well as reputational damage", the law firm explained.
Simon Stokes, a commercial partner at Blake Morgan, said: "Having proper procedures in place that identify and mitigate tax evasion facilitation risks will significantly reduce the risk of prosecution, and ought to provide a good defence if required."
"There is very little time left to ensure the appropriate action has been taken," he added.
In a briefing guide, the law firm said all organisations - not just those involved in financial services - should at least be conducting a risk assessment.
Even charities could be impacted by the changes, Blake Morgan said.
It said Government guidance suggests the Act could also be applied to manufacturers appointing distributors, as well as staffing companies engaged with and paying contractors.
Mr Stokes said: "Organisations will also need to consider whether they should provide training on the Act for relevant staff, and what measures they have in place to monitor their continued compliance with the Act."