Written by: Keith Tully
Date: Thursday 30th November, 2017
HMRC is increasingly targeting senior company executives with fines in its efforts to clamp down on corporate accounting irregularities and failings.
According to the latest data on the subject, the UK’s tax-gathering body has increased the number of senior executives it has issued fines to in relation to corporate accountancy failings by around 150 per cent over the course of the past five years.
HMRC was given the power to issue these fines through what’s known as the Senior Accounting Officer (SAO) regime.
Figures from the law firm Pinsent Masons suggest that 115 finance directors and other high ranking executives of big companies were hit with SAO fines over the course of last year.
The SAO regime came into effect in 2009 and it allows HMRC to issue executives with fines of £5,000 when it is convinced that an individual has failed to properly account for income or expenses in their capacity as company representatives.
Only companies with either turnovers worth in excess of £200 million or balance sheets accounting for more than £2 billion come under the purview of the SAO rules but those who do are obliged to appoint an individual as their SAO.
Once appointed to that role, the relevant individual effectively takes responsibility for ensuring that all income and expenses are properly accounted for in line with HMRC guidelines, with £5,000 fines representing the penalty for any failings that happen on their watch.
In the year 2012-13, there were only 46 such fines issued by HMRC but that figure has risen considerably over the course of recent years.
According to Jason Collins from Pinsent Masons, HMRC is going after the most senior people it can possibly take action against in its efforts to be strict on financial failings at big companies.
Mr Collins has also said that increasingly issuing fines against financial directors represents a “definite escalation of HMRC’s tactics”.
“Given the scale and complexity of the money flows in large businesses, simple errors in the finance department can result in miss-reporting and subsequent fines,” he said.
“Finance directors need to understand all the requirements set out by HMRC. The policies, procedures and systems in place to ensure tax compliance need to be carefully monitored to avoid the potential for mistakes.”
13th December 2017 According to the latest data from the National Office for Statistics (ONS), the consumer price index (CPI) rate of inflation was tracked at 3.1 per cent in November.
30th November 2017 HMRC is increasingly targeting senior company executives with fines in its efforts to clamp down on corporate accounting irregularities and failings.
28th November 2017 Retailers could be set for an underwhelming festive period if the latest polls on consumer confidence are to be believed.
22nd November 2017 Chancellor of the Exchequer, Philip Hammond, took to the podium this lunchtime to deliver his first official Autumn budget which he promised was going to be about “much more than Brexit”.
7th November 2017 Sales of non-food products among retailers across the UK showed a record low level of growth in the year to October 2017.
Every day we help companies just like yours turn things around against seemingly impossible odds, regardless of your situation we can help. Find your nearest office today.