Tax compliance risk management process for customers managed by Mid-sized Business: response to the provision of a certificate - general
The Mid-sized Business Customer Engagement Team (CET) must carry out or commission some immediate checks when they receive a certificate, although they might carry out a full consideration of the certificate at a later stage, see SAOG17700.
The immediate action must include
- checking that the certificate contains the necessary information, see SAOG15200, and
- checking whether the certificate is timely.
If the certificate is late the CET must consider whether a penalty might be due, see SAOG18500. If necessary they should take the appropriate penalty action, see SAOG19000, and take this lateness into account in future risk assessing, which will include drawing the company’s attention to this lateness.
WARNING: When the CET or Caseworker discusses the lateness of the certificate with the company or group they must not discuss whether or not we are considering raising, or have raised, a penalty on the SAO, see SAOG18800.
If it appears that a penalty may be due it is important that the CET or Caseworker follows the penalty procedure as soon as the failure has come to the attention of an officer of HMRC. This is because there is a restrictive time limit, see SAOG21200, for taking penalty action. Following the ordered steps set out at SAOG19000 the CET or Caseworker must discuss the potential penalty situation with their Assistant Director and obtain the approval of the Penalties Consistency Panel, before then explaining to the SAO (separately from other risks being addressed to the company/group) that
- there has been a failure and
- they intend to charge a penalty.
A failure ‘comes to the attention’ of a HMRC officer when that officer knows that there has been a failure. So, for example, if a CET receives a late certificate and reads it on the date of receipt, this would be the date when the failure comes to their attention.
If the SAO provides a late certificate after they incur a penalty for failing to provide a certificate by the time limit the CET or Caseworker must refer to SAOG17700 for guidance on considering the nature and content of that certificate.
Specific situations might arise between the CET or Caseworker and the SAO in connection with the provision of a certificate
- if the Customer Compliance Manager (CCM) expects a certificate and one is provided, see SAOG17610
- if the CCM does not expect a certificate and one is provided, see SAOG17620.