ACCOUNTANCY, legal and financial advisory businesses are among those that could be “sleepwalking” towards hefty fines if they fail to prepare for the forthcoming Criminal Finances Act, a tax expert at PwC has warned.

Under the terms of the act, which comes into force at the end of September, companies and partnerships will become criminally liable if they fail to prevent tax evasion by a member of staff or an external agent, even if they had no knowledge of it.

In order to avoid fines that could run into millions of pounds, businesses need to act now to ensure they are aware of all potential risks, said PwC tax director Jon Preshaw.

“Nobody expects businesses to have done everything by the end of September but they should have had a good go at carrying out a risk assessment and working out the extent to which they might already have procedures in place that could be helpful,” Mr Preshaw said.

“The really important thing is capturing that information so if something does go wrong they are able to explain what they have done to the tax authorities.

“They will need documentation of that risk assessment and some consideration of how those risks have been mitigated.”

Mr Preshaw said that while many businesses are not yet prepared for the act coming into force, larger ones in particular should make carrying out a risk assessment a priority.

“Large businesses are most likely to be impacted - they are not all ready but they have been doing some work and are getting there,” he said.

“There’s a layer of smaller businesses that are not likely to be affected and are not ready at all and there’s a lawyer in the middle where it needs attention.”