Personal Tax Accountability of Senior Accounting Officers

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One of the most debated announcements from the Budget was the requirement for Senior Accounting Officers (SAO) of large companies to certify annually that the accounting systems in operation are adequate for the purposes of accurate tax reporting. This will involve certifying that they have established and are monitoring tax controls, and have satisfied themselves that these controls are adequate for the purpose of accurate tax reporting. All taxes and duties within the remit of HMRC are covered.

Click here to listen to KPMG's Online Briefing held on Monday 11 May 2009* where we provided detail of HMRC's objectives, outlined our understanding of this new measure and identified what practical steps can be put in place to demonstrate either current compliance or how to become compliant.

* Please note that the event was prepared based on our understanding following various consultation meetings with HMRC representatives, and Wednesday 6 May's debate in the House of Commons. There were some interesting comments during the Parliamentary debate - the main highlights were as follows and you should consider the Q&A in light of them (we flagged these issues also during the briefing):

The base of companies covered in the legislation will be narrowed to only include those with a "large business relationship" with HMRC and a Customer Relationship Manager. This will include all those currently managed by the Large Business Service, plus those within the "Large & Complex" sector within Local Compliance who are large enough to attract a CRM (i.e. those with turnover exceeding £200m). We are pleased that HMRC acted on KPMG's representations in this matter to be pragmatic in accepting that this group of around 13,000 companies should be excluded
A single certificate to set out the two possible positions will be used instead of the initially proposed Type A and Type B certificates
The requirement to notify the company's auditors will now be removed

Our main message is for companies to take the time, whilst the legislation and guidance is being finalised, to assess what tax accounting arrangements there are currently in place for all taxes. You may wish to include representatives from many parts of your business - for example, Finance, HR, Procurement and, of course, Tax - in your discussions. This will help you establish your current position and what you may need to do to maintain and monitor the arrangements going forward.

Click here to see the Budget Note (BN62) and Impact Assessment issued by HMRC.

For more information contact:
Michelle Quest
Gary Harley
Stephen Callahan

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The Budget proposals and other tax changes are summarised on these pages. The Budget proposals may, however, be amended significantly before enactment. The content of this communication is intended to provide a general guide to the subject matter and should not be regarded as a basis for ascertaining liability to tax or determining investment strategy in specific circumstances. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.