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HMRC internal manual

Senior Accounting Officer Guidance

Senior Accounting Officer main duty: reasonable steps: what are reasonable steps

Reasonable steps are the steps a person in this situation would normally be expected to take to

  • ensure awareness of all taxes and duties for which the company is liable
  • ensure that risks to tax compliance are properly managed and
  • enable the various returns to be prepared with an appropriate degree of confidence.

The steps that are reasonable will depend on the particular circumstances within which tax accounting is taking place.

Reasonable steps might include establishing and maintaining processes within the tax accounting arrangements to

  • ensure compliance with legal requirements
  • periodically check and test systems, controls, process flows and transactions
  • ensure that the introduction of new systems and processes, or changes to them, are supported by appropriate planning, risk assessment, implementation and evaluation activities
  • ensure the maintenance and retention of required records in whatever form
  • ensure staff and any third party to whom responsibilities are delegated are appropriately trained, have the necessary guidance, qualifications, knowledge and experience needed to carry out their functions
  • obtain relevant facts and advice to allow the company to make tax sensitive judgements.

Dependent upon the person or persons the Senior Accounting Officer (SAO) places responsibilities with, it may also be a reasonable step for guidance to be documented in the form of process mapping for the use of that person or persons.

The reasonable steps taken to ensure that the company’s accounting arrangements are appropriate should give the company confidence to sign off tax returns as accurate.