The Economic Crime and Corporate Transparency Act 2023 introduces a new offence: failure to prevent fraud.
This is largely aimed at bigger organisations, but some farming businesses could be caught by the rules, especially those operating at scale or within larger groups.
Who’s in scope?
The new offence applies to companies or partnerships that meet at least two of these criteria:
- Over 250 employees
- Annual turnover above £36 million
- Assets exceeding £18 million
Most family-run or small-to-medium UK farms won’t meet these thresholds. However, larger agricultural groups, diversified farming businesses, or those in more complex structures are advised to review whether they are in scope.
What’s required if you’re caught by the regulations?
In-scope businesses must take reasonable steps to prevent fraud. This requires:
- Staff training on fraud risks
- Clear internal reporting lines
- Documented policies covering risks such as grant applications, subsidies, and supply chain integrity
Example scenario
A large farming group, managed through a holding company with several subsidiaries, was prosecuted after an employee submitted false subsidy claims. Management was unaware, but the group had no fraud prevention procedures in place. Under the new offence, this led to prosecution and fines – showing that even without senior management’s direct involvement, liability can arise if basic controls are lacking.
Key points for farmers
- Most farms aren’t affected, but if your business is larger or complex, assess whether you meet the thresholds
- Simple fraud prevention measures are your best defence – even if the risk feels remote
- Pay special attention to grant and subsidy fraud risks
- Your business structure matters – subsidiaries and agents’ actions can trigger liability
Conclusion
For most in the UK farming sector, these rules will not apply. But scale and group structure can bring your business within the scope, so it is wise to double-check and have at least basic fraud prevention steps in place.
Speak to a specialist
Contact our crime and regulatory team through or our online form or call us on 0345 209 1000
Written by Matthew Burgess – Paralegal
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