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HMRC internal manual

Senior Accounting Officer Guidance

Senior Accounting Officer main duties: appropriate tax accounting arrangements: What are tax accounting arrangements

Tax accounting arrangements are

  • the framework of responsibilities, policies, appropriate people and procedures in place for managing the tax compliance risk, and
  • the systems and processes which put this framework into practice.

Tax accounting arrangements cover the end to end process from the initial data input into accounting systems to arriving at the numbers which form the basis for completion of the tax return.

This includes the adjustments, data extraction and analysis which enable the completion of the return and all of the people involved in the governance and operation of these various stages.

It is not possible to define in detail what the tax accounting arrangements should be for any particular company.

They could include processes and activities to

  • consider opening balances and standing data
  • gather and record data in a systematic way
  • communicate roles and responsibilities
  • understand the key tax compliance risks in the business
  • design controls to mitigate these risks, for example,

    • separating responsibilities
    • delegating tasks to staff or third parties
    • making tax sensitive judgements
  • monitor to ensure that controls are operating effectively. The level of monitoring will vary according to the level of risk present.