For relevant organisations, this raises the stakes considerably. But it also presents an opportunity: to strengthen internal controls, reinforce governance, and demonstrate integrity across your operations and supply chain.
What’s Changing?
The legislation applies to organisations (or subsidiaries) if they meet two of the following criteria:
Turnover more than £36 million
Total assets greater than £18 million
More than 250 employees
If a person associated with your organisation commits fraud for the benefit of the organisation and it was unable to demonstrate that reasonable procedures were in place to prevent it, your organisation could face an unlimited fine.
The definition of who can commit the offence is wide. Employees, agents, subsidiaries or associated persons (other third parties within the supply chain) could cause an offence under the Act regardless of whether directors or senior managers have ‘ordered’ the fraud.
Unlike previous legislation (such as the Bribery Act 2010) there will be no custodial sentence for directors.
Why it Matters
The legislation casts a wide net. It covers an extensive scope of fraudulent behaviours, alongside financial and non-financial misreporting and wider definitions under the Fraud Act 2006.
Being regulated and compliant under other regulations would not automatically qualify as reasonable procedures under the Act.
The legislation says that businesses must implement a fraud prevention framework built around six core principles:
Board level commitment - the responsibility lies with those charged with governance
Risk assessment - assess the nature and extent of its exposure to fraud risk
Due diligence - undertake relevant customer and supplier due diligence
Training - policies should be communicated and understood
Monitoring and review - procedures are monitored and improved where necessary
Risk-based prevention controls - businesses should design and implement proportionate controls based on its risk assessment
We understand that many businesses already take fraud seriously. But we also acknowledge that documentation, consistency, and proportionality can vary - and this legislation raises the bar. That’s where Dains comes in.
We can provide you with a current state assessment of your fraud risk framework and your preparedness for the legislation.
This will give you a view on which areas you need to focus and prioritise between now and 1 September 2025.
Our support includes:
Fraud risk assessment: Our counter fraud experts can identify your unique risks across people, processes and operations.
Tailored fraud training: We will design and provide bespoke annual training to your organisation.
Fraud investigations: Led by Certified Fraud Examiners, we can efficiently and discreetly undertake fraud investigations.
Whistleblowing Advisory: We can advise you on how to implement robust and independent reporting procedures.
Testing of fraud risk controls: We can ensure your fraud prevention measures are working effectively.
