Avoiding Penalties for Failure to Comply With the UK’s New Measures
How to Avoid the Penalties for Failure to Comply With the UK’s New Measures
“The SFO is ready to act if corporates fail to comply with their new responsibilities” said Nick Ephgrave, Director of the Serious Fraud Office. He continued, describing the Economic Crime and Corporate Transparency Act (ECCTA) as “a significant new tool for prosecutors to tackle serious and complex fraud which damages UK business and undermines our economy”. Under the ECCTA the only defence is to have ‘reasonable’ fraud-prevention procedures in place. Penalties include an unlimited fine and confiscation of profits.
Understanding the Economic Crime and Corporate Transparency Act (ECCTA)
In the UK, liability risk has increased markedly in recent years. Like the Bribery and Criminal Finances Acts, ECCTA includes the ‘failure to prevent’ measure, which removes the need to show that senior management knew about the fraud. Companies can no longer claim ignorance. This level of corporate transparency requirement is continuing in the UK; ECCTA is going to be swiftly followed by a change to the UK Corporate Governance Code (Provision 29). From 1 January 2026, companies that follow the code are required to declare the effectiveness of their internal controls (for accounting periods beginning on or after this date). These measures apply to organisations that meet the statutory size threshold, generally at least two of: more than 250 employees, over £35m turnover or over £18m in assets.
The Importance of Internal Controls in Fraud Prevention
Of course, most organisations have anti-fraud controls in place. But these new measures will raise the bar and bring them under greater scrutiny. This will help to meet the problem identified by the ACFE research. It shows that worldwide, more than half of cases of organisational fraud occurred due to lack of internal controls (32%) or overriding existing controls (19%).
So how can large organisations avoid penalties and reputational damage, whilst improving internal efficiencies? First, assess whether your internal control frameworks are sufficiently designed, monitored and reported. Second, to show your organisation has ‘reasonable procedures’ in place, review your risk assessments, monitoring, due diligence, training, and controls. It is important to demonstrate the right mechanisms and documentation. There’s more on the ‘reasonable procedures’ expectation in our blog on Six Principles for your Fraud Prevention Framework.
Leveraging Technology for Enhanced Financial Compliance
Finally, Sixthfin can help. Our accounting controls technology helps large organisations to avoid the penalties of non-compliance with the UK’s new measures. Not only that, it also creates efficiencies, through better controls, across the wider business. Our technology addresses the two major challenges of finance and control functions: the centralisation and harmonisation of financial data; and the need for a common framework of controls, procedures and investigations. In 2024 we analysed more than €170 billion.
The downside of non-compliance is not just in fines. Soft costs can include the increase in cost of capital, impact on corporate reputation and exposure to greater regulatory scrutiny which distracts the senior team from the business of growth.
There is an upside to compliance however. Large organisations can take advantage of the new UK measures, with Sixthfin technology. Alongside making compliance easier, we transform financial data into strategic decision-making levers. Demonstrating robust controls can improve competitive advantage, which impresses investors, potential partners and talent. For CFOs and finance teams good practice should be about more than keeping the SFO at bay. Your defence strategy should involve embedding integrity into financial systems, for the long-term good of the organisation.
Ephgrave sums it up; “The publication of this guidance means that time is running short for corporations to get their house in order or face criminal investigation”. Avoid the soft and hard penalties of compliance in a hurry, with Sixthfin technology.
About the author:
Olivier Cornet, UK Country Manager
Olivier Cornet joined Sixthfin in 2024 as UK Country Manager, bringing over 20 years of B2B software expertise. While he possesses a strong background in regulatory standards, Olivier is passionate about the bigger picture: helping finance teams work smarter. He guides companies in adopting solutions that not only ensure compliance but significantly improve the efficiency of their daily financial operations.
Published on 09.12.2025
