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HMRC internal manual

Senior Accounting Officer Guidance

From
HM Revenue & Customs
Updated
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In what circumstances is a penalty chargeable: certificate provided containing a careless or deliberate inaccuracy

Where a Senior Accounting Officer (SAO) makes an inaccuracy in the certificate despite taking reasonable care, they are not liable to a penalty.

However, where an SAO provides a certificate within the time allowed but that certificate contains a careless or deliberate inaccuracy, they may be liable to a penalty of £5,000.

An inaccuracy in a certificate is careless if it is due to a failure by the SAO to take reasonable care.

An inaccuracy in a certificate is deliberate if the SAO knowingly gives HMRC an inaccurate certificate.

An inaccuracy in a certificate that was neither careless nor deliberate when the certificate was given is treated as careless if the SAO

  • discovers the inaccuracy some time later and
  • does not take reasonable steps to inform HMRC.

Where there is more than one SAO for a financial year

Unlike the main duty penalty, a person who becomes the SAO for a company after the end of the financial year but before the filing date can be liable to a penalty for providing a certificate for that financial year which contains a careless or deliberate inaccuracy. For guidance on which person will be liable for a penalty for failure to provide a certificate, see SAOG18700.

Where a person is the SAO for a number of group companies

Where a person is the SAO for a number of group companies, they are responsible for providing a certificate which does not contain a careless or deliberate inaccuracy.

However, see the following situations.

Situation 1

The financial years of this company and the other group companies for which the particular  person is the SAO all end on the same day,

and

we have already charged a penalty on that person in respect of one of the other group companies for

  • failure to provide a certificate or
  • inaccuracy in a certificate.

Can we charge a penalty for an inaccuracy in a certificate?

We cannot charge an inaccuracy penalty on that person in respect of this company.

Situation 2 {.filledcircle}

The financial years of this company and the other group companies for which the particular  person is the SAO do not end on the same day

and

We have already charged a penalty on that person in respect of one of the group companies whose financial year ends within the company’s financial year for

  • failure to provide a certificate or
  • inaccuracy in a certificate.

Can we charge a penalty for an inaccuracy in a certificate?

We cannot charge an inaccuracy penalty on that person in respect of this company.

Situation 3

No penalty has been charged in the situations above for

  • failure to provide a certificate or
  • inaccuracy in a certificate.

Can we charge a penalty for an inaccuracy in a certificate?

We can charge an inaccuracy penalty on the person in respect of this company.

Situation 4

The SAO chooses to send a single certificate for all of the companies for which they are SAO (see SAOG15100) but omits one or more of the companies from the list of companies in the certificate.

Can we charge a penalty for an inaccuracy in a certificate?

This is not an inaccuracy. It is a failure to provide a certificate for one or more companies.

The SAO may be liable to a penalty as per SAOG18500 in respect of an omitted company.

Example

The same person holds the SAO role for all the companies within a group. The companies’ financial year ends are

  • Company A - 30 June
  • Company B - 30 September
  • Company C - 31 December

We charge a penalty for providing an inaccurate certificate on the SAO in respect of company A’s financial year ended 30 June 2014. This financial year end date is within company B’s financial year ended 30 September 2014 and company C’s financial year ended 31 December 2014. We could not charge the SAO an inaccuracy penalty in relation to these two financial years even if the SAO had provided an inaccurate certificate in relation to those two companies in those two financial years.

However, if we had charged a penalty for providing an inaccurate certificate on the SAO in respect of company B’s financial year ended 30 September 2014 first, the situation would be different. In that case, when we came to consider the SAO’s provision of an inaccurate certificate for company A, we could also charge the SAO with an inaccuracy penalty for A for its financial year ended 30 June 2014. This is because, although we have already charged a penalty for providing an inaccurate certificate in respect of company B, its financial year does not end within the relevant financial year of company A. However, we could not charge a penalty on the SAO in respect of company A for its following year, the year to 30 June 2015, if there was a similar failure.

To ensure that Customer Relationship Managers (CRMs) or the Mid-sized Business Customer Engagement Team (CET) apply the correct treatment to further failures that may arise, CRMs or the CET should maintain a record of penalties assessed for certificates containing a careless or deliberate inaccuracy in group situations.

If CRMs, the CET or a Caseworker need advice in such cases they should contact their nominated Business Contact.

Where a company is the representative member for a group for VAT purposes

Some groups of companies may appoint one of their number as a representative member to deal with all aspects of the group’s Value Added Tax (VAT) obligations and liabilities.

An SAO of a representative member company cannot simply assume that information and figures given to them by other group companies is correct, see SAOG14335 and SAOG14465. If they do so, and provide a certificate on that basis it may be inaccurate as a result of their careless or perhaps deliberate behaviour.

Other penalties for a financial year

A penalty for a failure to meet the main duty may be chargeable on an SAO for a company for a financial year in addition to a penalty for providing a certificate that contains a careless or deliberate inaccuracy. The CRM, CET or Caseworker may become aware of these failures at different times and raise penalty assessments at different times.

If a certificate is provided late and subsequently found to contain a careless or deliberate inaccuracy, we cannot charge two penalties. The failure to be penalised is the failure to provide the certificate in the time allowed and there is only one penalty of £5,000.

Where company has not yet notified HMRC of its SAO

A company’s SAO is ‘the director or officer who, in the company’s reasonable opinion, has overall responsibility for the company’s financial accounting arrangements’, see SAOG12100 and SAOG16500. If a certificate containing a careless or deliberate inaccuracy is submitted at a time when the company has not notified HMRC of the name of its SAO or SAOs, see SAOG18550.

FA09/SCH46/PARA5

FA09/SCH46/PARA8

FA09/SCH46/PARA9(3)