Does your business fall within the Senior Accounting Officer (SAO) regime? If it does then having an SAO strategy in place to ensure you are meeting the relevant obligations is becoming increasingly important.
The SAO requirements have been in place for 4 years now and the last year has seen a significant shift in HMRC’s attitude in their dealings with businesses affected by the regime. We have seen that HMRC are no longer applying a “light touch” approach and the officers responsible for enforcement of the SAO requirements have received high level training from senior tax professionals working both in practice and industry. This together with a beefing up of the SAO guidance indicates that the SAO requirements will be a cornerstone of HMRC’s risk assessment of Large Businesses going forward. As a consequence of SAO regime becoming more important to HMRC, businesses are increasingly seeing SAO issues appear on Boardroom agendas.
As such, businesses should not be complacent. In future they can expect to have much more in depth discussions with HMRC on the actions that have been taken to assess, test and improve the controls and processes that impact their tax accounting arrangements. This monitoring activity is very much seen as an ongoing, year round obligation and not something just to be considered prior to submission of the year-end certificate. HMRC want businesses to engage openly with them on the reviews being undertaken and importantly be able to explain what is being done to rectify any shortcomings identified.
In many businesses the SAO will not always have clear visibility of all the processes that drive the figures included on the tax returns. This is often particularly the case for taxes of a transactional nature, such as VAT.
It is therefore important to ensure that those people within the business who take key decisions which determine the VAT/tax treatment of accounting entries are given the required resources and training needed to do their job accurately. Providing staff with up-to-date tools to do their job properly and on a timely basis will have the additional benefits of giving comfort to SAOs when signing off the certificate, and providing the evidence required by HMRC that compliance with the main duty is being taken seriously.
If SAO affects your business it is vital you can demonstrate an ongoing commitment to implementing and maintaining up to date and robust tax accounting arrangements. To find out more about how the regime works and for top tips on best practice, view our Whitepaper by clicking the button below: