The Triadic Dilemma: Why Corporate Tax Crime and Corruption Remain So Hard to Tackle

Corporate tax crime and corruption are often treated as separate worlds; one about dodging tax, the other about bribery and abuse of power. But we argue that the two are deeply intertwined, mutually reinforcing, and structurally difficult to prosecute. The UK, despite having a sophisticated legal framework, still struggles to hold corporations and senior executives meaningfully accountable. Three core dilemmas explain why.

1. The Ambiguity Problem: What Counts as a Tax Crime?

The UK has no single definition of “tax crime.” Instead, offences are scattered across common law (like cheating the public revenue) and a patchwork of statutes. This fragmentation creates confusion for policymakers, prosecutors, and researchers alike.

Corporate tax behaviour adds another layer of complexity. The boundary between legal tax avoidance, aggressive tax planning, and outright evasion is notoriously porous. Multinationals exploit this ambiguity through profit shifting, opaque corporate structures, and offshore vehicles. Judicial cases such as VAT fraud and Apple–Ireland state aid dispute, show how sophisticated these schemes can be.

Corruption and tax crime also blur together. False invoicing, bribery of tax officials, and manipulation of financial records often serve dual purposes: evading tax and concealing corrupt payments. Yet legal definitions of corruption and fraud remain inconsistent, making empirical measurement and enforcement even harder.

2. The Criminalisation Problem: A Wide Legal Net, Narrow Enforcement

On paper, the UK has strong tools to criminalise tax offences. Common law offences like conspiracy to defraud, and statutory offences under the Taxes Management Act and VAT Act, give prosecutors broad scope. Strict liability offences even remove the need to prove intent.

But in practice, enforcement is weak. Out of 76,000 suspected tax fraud reports in 2022–23, only 540 individuals were charged. HMRC’s longstanding preference for civil recovery over criminal prosecution reflects a revenue‑first mindset: prosecution is seen as inefficient and risky.

For corporations, the “failure to prevent” model, introduced in the Bribery Act 2010 and extended through the Criminal Finances Act 2017 and ECCTA 2023, was meant to solve the identification doctrine problem. Instead, it has become heavily intertwined with Deferred Prosecution Agreements (DPAs), which allow companies to avoid conviction in exchange for cooperation and compliance reforms. Critics argue this creates a two‑tier justice system where large firms negotiate their way out of criminal liability.

3. The Corporate Liability Problem: Fragmented Laws, Limited Accountability

The UK’s corporate criminal liability regime is inconsistent across tax and corruption offences. Similar misconduct, like false invoicing, may fall under entirely different statutes with different thresholds and defences. The Bribery Act’s section 7 offence is broad and powerful, while the Criminal Finances Act’s tax evasion provisions are narrower and harder to apply.

Case studies like Güralp Systems reveal a troubling pattern: corporations admit wrongdoing and secure DPAs, while senior executives are acquitted due to evidential gaps or procedural failures. This disconnect undermines deterrence and public confidence.

Where Do We Go From Here?

We argue for a more integrated approach, treating tax evasion as a form of corruption, improving data classification, and reassessing the real-world effectiveness of failure‑to‑prevent offences. Without clearer definitions, stronger enforcement, and more consistent corporate liability rules, the UK will continue to struggle with the triadic dilemma at the heart of tax crime and corruption.

For a full version of our study please read:

Lui A. and Turksen U., The triadic dilemma in the criminalisation and prosecution of corporate tax fraud and corruption in the United Kingdom, (2026) Criminal Law Review, Issue 2, 86-103.