Business Ethics and Financial Crime Controls
Page Contents
Corporate Criminal Offence (Tax Evasion)
Bribery Act 2010
The act covers four categories
- A general offence of bribing; offering, promising, or giving a bribe to another person
- A general offence of being bribed; requesting, agreeing to receive, or accepting a bribe from another person
- An offence of bribing a foreign public official
- A corporate offence of failing to prevent bribery by persons associated with relevant organisations
An organisation may be liable because an associated person e.g. an employee/ partner has committed an offence under the Act. The only defence by the organisation would be to demonstrate adequacy of their organisational policy, procedures and policing of these.
The UK Ministry of Justice Guidance issued in March 2011 (UKBA Guidance) sets out the following six principles that should inform an organisation’s approach in establishing adequate procedures. The focus in on active and effective procedures, rather than paper policies:
- proportionate procedures (i.e. procedures which are proportionate to the bribery risks which the organisation faces given its activities, which are clear, practical, accessible, effectively implemented and enforced)
- top-level commitment (i.e. the senior management/partners should foster a culture within the organisation in which bribery is never acceptable)
- risk assessment (i.e. the organisation should periodically assess and review the nature and extent of its exposure to potential internal and external bribery risks, documenting reviews)
- due diligence (i.e. applying due diligence procedures in respect of persons who perform or will perform services for and on behalf of the organisation)
- communication including training (i.e. ensuring that bribery prevention policies and procedures are embedded and understood through communication
- monitoring and review (i.e. monitoring and reviewing the policies and procedures and making improvements where necessary)
Protect your practice by:
- Carrying out a risk assessment of the likelihood of bribery or corruption
- Developing a code of conduct and procedures/policies, including reporting procedures for staff members and decide how allegations would be investigated
- These should be well publicised and included as part of staff training and included in the staff handbook
Prompt independent legal advice is recommended should any instances of corruption occur. Convictions under the Act may result in imprisonment of up to 10 years or a fine.
GMS Contract
You should also be aware of the requirements regarding bribery and corruption of the GMS Contract, namely provision 93, sections 1-6
“Gifts
22.1.—(1) The contractor must keep a register of gifts which—
(i) a patient,
(ii) a relative of a patient, or
(iii) any person who provided or would like to provide services to the contractor or its patients in connection with the contract; and
(b) have, in the contractor’s reasonable opinion, an individual value of more than £100.00.”
Corporate Criminal Offence (Tax Evasion)
Offences will be committed where a relevant body fails to prevent an associated person criminally facilitating the evasion of a tax, either owed in the UK or a foreign country.
This guidance explains the policy behind the new offences and is intended to help relevant bodies understand the types of processes and procedures that can be put in place to prevent associated persons from criminally facilitating tax evasion. It will inform the conduct of a risk assessment and the creation of procedures proportionate to that risk. The guidance is designed to be of general application and is formulated around the following six guiding principles:
- Risk assessment (assessing the nature and extent of exposure to the risk of an associated person criminally facilitating tax evasion offences – documented and kept under review)
- Proportionality of risk-based prevention procedures (adopting reasonable procedures to prevent associated persons from criminally facilitating tax evasion, proportionate to the risk of associated persons committing tax evasion facilitation offences)
- Top level commitment (senior management/partners should be committed to preventing associated persons from engaging in criminal facilitation of tax evasion, fostering a culture in which activity intended to facilitate tax evasion is never acceptable)
- Due diligence (applying due diligence procedures, taking an appropriate and risk based approach, in order to mitigate identified risks)
- Communication (including training) (ensuring that prevention policies and procedures are communicated, embedded and understood throughout the organisation, through internal and external communication, including training)
- Monitoring and review (monitoring and reviewing preventative procedures, making improvements where necessary)
Protect your practice by:
Carrying out a risk assessment of the likelihood of tax evasion (VAT, NI, Income tax etc – see also IR35 rules)
Developing a policy and procedure, including reporting procedures, for staff members
These should be well publicised and included as part of staff training and included in the staff handbook
Fifth Money Laundering Directive (The Trust Register)
On 10 January 2020, the Fifth Money Laundering Directive (5MLD) was transposed into UK law. One objective of the 5MLD was to broaden the scope of trusts required to comply with and sign up to the Trust Register Service (TRS), which may apply to some GP surgeries depending on how they are structured.
Property-owning GP partners may be required to register, particularly where the names on the land registry entry do not match the names of the property-owning partners, or where there are more than five surgery-owning partners. Similarly, and depending on the precise wording of your Primary Care Network (PCN) agreement, monies held by one practice on behalf of a PCN could be construed as the formation of a trust and may trigger a registration requirement.
Unless exempt, 5MLD requires the express trusts to register with the TRS. HMRC has published guidance on what may constitute an express trust here and instances where exemptions may apply here .
Please don’t panic, DR Solicitors have produced a really useful blog on this topic and The General Practitioners Defence Fund (GPDF) have also shared with us an interim update below:
You will be aware that on 1 September 2022 there will be a requirement for Trusts to Register with HMRC and that this will likely affect some practices, PCNs, Federations and possibly LMCs.
The GPDF has commissioned an advice note which will be distributed as soon as we are able, but this will not be before the deadline of 1 September.
The website of the Institute of Chartered Accountants in England and Wales contains information from HMRC on failure to Register or late registration which you may find helpful:
In recognition of the fact that the registration requirement is a new and unfamiliar obligation for many trustees, there will be no penalty for a first offence of failure to register or late registration of a trust. The exception is when that failure is shown to be due to deliberate behaviour on the part of the trustees. In that case, or where there are repeated failures, a £5,000 penalty may be charged per offence.
In practice, this means that, should HMRC become aware of a trust which has not been registered by the relevant deadline – either because that trust has been registered late or because HMRC has identified that trust’s existence by other means – HMRC may issue a warning letter to the trustee or agent. It would usually only charge a penalty if that letter were not acted on.
The website contains other relevant information and can be accessed at: https://www.icaew.com/insights/tax-news/2022/aug-2022/hmrc-updates-trs-manual-in-advance-of-1-september-deadline. (Wessex LMC update Aug 2026: This link has been removed, however you can obtain comprehensive guidance on this subject via UK law and guidance on anti-money laundering | ICAEW)
GPDF is unable to answer individual queries which should be taken up with the appropriate professional advisers.
As soon as we have any further information, we will share it with practices.
Gift Register
The NHS (GMS) Regulations and most PMS contracts contain a clause that requires practices to maintain a register of gifts deemed to be worth more than £100, that can be made available to the commissioners, on reasonable request, of all gifts made to the practice or individuals.
Please see the following link for up to date regulations: The National Health Service (General Medical Services Contracts) Regulations 2015
The BMA reinforces this but also alludes to the ethical issues Gifts or donations from patients (bma.org.uk)
MDU offer similar advice Can I accept gifts from patients? (themdu.com) (Add)
DR Solicitors have a useful article on their website about this topic. Should a GP practice accept gifts and legacies? – DR Solicitors and you may wish to consider some of their recommendations/advice listed below:
- Practices need to be careful about what gifts and legacies they accept and how these are recorded. The larger the gift, the more care needs to be taken.
- Remember that this is, at heart, an ethical issue and whatever decision you make, would you be comfortable in justifying it in front of the GMC, or perhaps even a journalist?
- For larger gifts and legacies, in addition to recording them in the gift register, we would recommend that you prepare a paper trail setting out your thinking behind the decision you took and any professional advice that you sought.
You would also be well advised to check what your partnership deed has to say about sharing of gifts and legacies to minimise the risk of future partnership disputes.
As alluded to above, we recommend that reference is made to the management of gifts within the Partnership Agreement.