Senior accounting officer – penalties and assessment

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Senior accounting officer – penalties and assessment
  • When will a penalty apply?
  • More than one SAO in a financial year
  • Reasonable excuse
  • Penalty procedure
  • Raising an assessment
  • Appeals

The SAO provisions introduce three potential penalty positions, with one chargeable on the company and the other two assessable on the SAO personally. Each of the penalties is a fixed amount of £5,000 with no reduction or mitigation for any reason. The three potential penalties are assessable as follows:

  • on the SAO for failure to comply with the main duty of taking reasonable steps to ensure appropriate tax accounting arrangements (FA 2009, Sch 46, para 5; SAOG18100 )
  • on the SAO for failure to provide a timely certificate, or if he provides an incorrect certificate (only if it is considered to be as a result of careless or deliberate behaviour) (FA 2009, Sch 46, para 7)
  • on the company if it fails to notify HMRC of the name(s) of the person(s) nominated to be the SAO

FA 2009, Sch 46, paras 4, 1(1)

If two penalties arise in respect of the same company, an SAO may be liable for both penalties (failure to comply with main duty and incorrect certificate) within that company.

If an individual is the SAO for one or more companies within a group only one certificate is required to cover the companies. Therefore, the SAO may only be liable for one penalty in respect of the accuracy and / or timeliness of the certificate.

Where the financial year end dates of the companies under the same SAO are not the same it will depend on the facts and circumstances as to whether the CRM / CET will look to impose more than one set of penalties. Ultimately the decision will be made by the Penalties Consistency Panel of HMRC (see below).

A penalty charged under the SAO regime is deemed to be an administrative penalty. Therefore

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