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HMRC internal manual

Senior Accounting Officer Guidance

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HM Revenue & Customs
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Senior Accounting Officer must provide a certificate to HMRC: level of details about shortcomings in certificate

The following are examples of the level of detail that a Senior Accounting Officer (SAO) might include in a qualified certificate to help the Customer Relationship Manager (CRM) or the Mid-sized Business Customer Engagement Team (CET) understand the shortcomings in the tax accounting arrangements. These examples are written from the point of view of the SAO. They should not be taken as definitive but are merely provided as a broad guide. The wider context of these shortcomings is provided in the examples of appropriate/inappropriate tax accounting arrangements in SAOG14350 - SAOG14353.

Example 1

Company A’s system for accounting for travel expenses includes a range of checks which enable it to identify errors and calculate the related under or over declaration of tax which is then disclosed. However, there are no arrangements in place to identify why these errors have occurred and therefore to prevent them re-occurring and consequently I have regarded this as a shortcoming in the company’s tax accounting arrangements.

Example 2

The tax accounting arrangements of Company B do not include procedures for checking that coding decisions made by staff on taxable/non-taxable expenses are correct. I have taken the view that these are shortcomings in the companies’ tax accounting arrangements.

Example 3

VAT coding - Company C has comprehensive training and manuals for staff on coding transactions for VAT purposes and this is supported by a range of checks. However, my review of the company’s tax accounting arrangements has shown that there are no standard procedures in place to ensure that the manuals are updated immediately and as a matter of course when new products are introduced. Consequently I have regarded this as a shortcoming in the company’s tax accounting arrangements.

Example 4

Company D - in reviewing the company’s procedures for attributing expenditure on hotel builds for capital allowance purposes we recognised that the individuals responsible for doing this had not received the appropriate training. There was no system to review the reasonableness of the outcome of the estimation technique used to determine treatment of items under the set amount. Bearing this in mind I am of the view that there were shortcomings in the company’s tax accounting arrangements throughout the financial year. However, we have since brought in an expert to review the calculations and made a significant adjustment on our tax return as a result. The relevant team have now received the appropriate training and we will be periodically using the expert to check their work.