Tax compliance risk management process for customers managed by Large Business: response to the provision of a certificate - the CRM does not expect a certificate but one is provided
This situation will arise where previous considerations, with or without the company, have led the Customer Relationship Manager (CRM) to believe that the company is not a qualifying company and therefore the CRM will not expect a certificate to be provided.
The provision of a certificate by the Senior Accounting Officer (SAO) may suggest that the company is a qualifying company, despite any previous discussions and the absence of any notification of SAO details by the company.
The CRM must look at the known information about the company, and if appropriate the group, to see whether it appears to be a qualifying company, see SAOG11100.
If the company does not appear to qualify, the CRM must discuss with the person who has submitted the SAO certificate the reasons why that person believed they should do so. The reasons might be that
- the person believes that the company was a qualifying company. In this case the CRM must explore those reasons and if it does appear that the company may be a qualifying company deal with the company in accordance with the next bullet. If it is not a qualifying company or, where it is a qualifying company that the person is not an SAO of it, advise the person who submitted the certificate accordingly.
- the person believes that every company has to comply with the SAO legislation. The CRM must advise the person of the limitations of the SAO legislation.
- the person has provided a certificate for this company in the past. The CRM must advise the person of the terms of the SAO legislation with particular reference to the qualifying company conditions applying to each financial year.
If the company does appear to qualify, the CRM must discuss with the company, subject to the guidance at SAOG16800, whether, in fact, the company is a qualifying company. If it is a qualifying company,
- the company may have failed to notify the SAO details to HMRC within the time allowed, and
- the CRM must check whether the person who submitted the certificate was an SAO entitled or required to do so, see SAOG12000, and if not advise that person accordingly and identify the person or persons who were the company’s SAOs for the financial year, and
- the CRM must consider whether the certificate was timely and if not identify who may be liable to an SAO failure penalty.
In all qualifying company scenarios above the CRM must
- consider whether penalties may be chargeable on the company, see SAOG18300, and/or an SAO, see SAOG18500 and, if so, follow the step by step guidance at SAOG19000 to take the appropriate penalty action
- consider this apparent failure as part of the risk assessment of the company/ group.
Whether or not the company is a qualifying company, file the certificate for consideration in the risk assessment. Refer to SAOG16700 for guidance on considering the nature and content of the certificate.