Tax Partners Tony Spillett and Ed Dwan recently hosted a live webchat giving our view on the controversial legislative changes that mean that senior accounting officers (SAOs) will soon be forced to take on personal accountability for delivering accurate tax reporting from their company’s accounting systems. The personal fines could be a maximum of £10,000 per year for non-compliance, and in addition the company could also be liable for £5,000 for not notifying HMRC of the identity of their SAO. A qualifying company is defined as having either turnover in excess of £200m and/or gross assets in excess of £2bn.
Reactions to the new legislation have varied significantly. On the one hand HMRC have taken a reasonably flexible approach, for example they will leave it up to organisations to decide who the SAO will be - indeed they believe that the majority of qualifying companies have already got what they need in place. On the other hand, other business advisers would have organisations believe that this will affect their company on a grand scale, involving a complete overhaul of processes and systems.
Our opinion falls somewhere in between these conflicting views.
We think that HMRC may be understating what is needed from a company because there will be a whole range of different processes, departments and people involved who will have to link together and assess that what they have is sufficient. Whilst we believe it's true that there is a lot that can be done internally, it will not be a one size fits all solution and there will be a need for an external perspective and or facilitation from professional advisers.
Our approach is to help clients (senior accounting officers, heads of tax and other key individuals) to understand the purpose of the legislation, identify their priorities and the work required to be able to sign a “clean” certificate. We recognise that many clients will be unwilling to incur substantial fees in this area and we therefore focus on “how to do enough”.