SFO turns to tax returns to uncover bribery

12 September 2011

It was reported last week that the SFO will call for companies' tax returns in a bid to uncover (particularly overseas) bribery payments.

Rather than create large teams of heavy-handed investigators, true to its word, the SFO is relying on multi-agency co-operation, self-reporting and whistleblowing.

I note from Daniel Hemming's comments on our RPC Tax Blog that the SFO might also be able to obtain a given company's records direct from HMRC.  As noted by Paul Castellani, HMRC is already partnering with mortgage lenders to sell information to verify mortgage applications.  HMRC - which we might once have thought of as the discreet custodian of our confidential financial information - appears increasingly willing to assist others by providing the valuable information it holds.

The SFO clearly hopes that companies will continue to claim tax deductions for bribes paid overseas which was allowed until 2002. It remains to be seen whether this information-gathering tactic is deployed in respect of specific investigations or speculatively.  The same report referred to the SFO's promise that we will not have to wait too long for the first corporate prosecutions under the new Bribery Act.  This suggests the SFO is actively seeking a high profile target.

Those interested to see the new corporate offence tested can be sure that the prosecution of a court clerk for allegedly accepting cash (on which I commented last week) will be a mere warm-up act ahead of what are likely to be high profile, precedent-setting cases.

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