Global Daily Tax News, UK Introduces Criminal Offence For Failing To Prevent Fraud, (Sep 2, 2025)

The UK introduced a new corporate criminal offence for "failure to prevent fraud" on September 1, 2025.

Introduced as part of the Economic Crime and Corporate Transparency Act (ECCT) 2023, the offence is intended to hold large organizations to account if they profit from fraud.

Endorsed in parliament with cross-party support, the new law provides that large organizations can be held criminally liable where an employee, agent, subsidiary, or other "associated person" commits a fraud intending to benefit the organization.

In the event of prosecution, an organisation will now have to demonstrate to the court that it had reasonable fraud prevention measures in place at the time the fraud was committed.

Noting that fraud increased by 31 percent last year, the Government said it is preparing the publication of a new, expanded fraud strategy, which will "place tackling fraud against business at its heart".

Fraud Minister David Hanson said: "Fraud is a shameful crime, and we are determined to bring those responsible to justice wherever it takes place. Today marks a pivotal moment for businesses, and this new offence strengthens our anti-fraud culture to protect businesses, build corporate trust, and support long-term economic growth, a cornerstone of this government's Plan for Change."