A UK company with turnover in the UK of £200 million or UK assets of £2 billion must appoint a Senior Accounting Officer (SAO). The same applies for UK companies that are members of groups where combined UK turnover or assets exceeds these totals.
The SAO is a director or other officer with responsibility for ensuring that the company meets its tax and financial accounting obligations. A single SAO can have responsibility for one or more group companies, but they must always be employed by the group. SAO duties cannot be out-sourced to third party advisors.
The SAO must file an annual report with HMRC confirming whether or not the obligations are met. Clearly this means that the SAO must be able to form an opinion and influence behaviours. If HMRC considers they are not an appropriate candidate their appointment can be challenged, so it is important that the SAO has the information and authority to fulfil their duties.
Significant non-compliance penalties can be charged to the company if it fails to notify HMRC of its SAO before the accounts filing date. The SAO can suffer similar penalties personally if they fail in their duty to report to HMRC or make an inaccurate report.
A recent VAT Tribunal case involved personal penalties charged against an SAO for allegedly failing to fulfil his SAO obligations. On this occasion, the Tribunal dismissed the penalties because it found that reasonable steps had been taken, but it demonstrates that HMRC can and will pursue personal penalties on SAOs.
Companies that need an SAO are also required to publish their tax strategy on line annually. Also, if the company is a member of a multinational group with global income of €750 million it must also be included in Country By Country reporting (click here for more information).