Senior Accounting Officers Declaration – Scope of Legislation Narrowed
12/08/2009
The legislation requiring senior accounting officers of qualifying companies to make a declaration to HMRC concerning the adequacy of their accounting systems for tax reporting, has now been revised so that its scope is restricted to only the largest companies and groups.
The definition of "qualifying company" is no longer based on Companies Act thresholds for large companies, and instead requires turnover and gross assets for the previous financial year to be compared to set limits in order to ascertain whether a declaration is needed. A company will fall within the legislation if its turnover, either alone or when aggregated with other UK companies in the same group, is more than £200m or it has gross assets of more than £2bn.
If a company does fall within these limits, the company has an obligation to notify HMRC of the name of its senior accounting officer (SAO) each year, and the SAO must provide HMRC with a certificate stating the company has appropriate tax accounting arrangements or alternatively, provide an explanation where it does not. In this context "tax" covers a wide range of taxes including for example corporation tax, PAYE, VAT, IPT, SDLT and Customs duties.
Penalties for non-compliance of £5,000 per offence can be levied on both the company and the SAO personally, with a potential maximum penalty for the SAO of £10,000 per financial year.
If you feel that your company may fall within this legislation, please contact us for assistance with meeting your obligations.
If you have any queries concerning the above please contact Michelle Malone on 0161 493 1930.