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HMRC internal manual

Senior Accounting Officer Guidance

From
HM Revenue & Customs
Updated
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Other matters: interaction with other penalties

It is possible for a penalty to be chargeable under the Senior Accounting Officer (SAO) provisions of Schedule 46 FA09 at the same time as a penalty is chargeable under Schedule 24 FA07 for an inaccuracy in a return or document.

Whether both penalties will be chargeable will depend entirely on the circumstances of the case. This would occur, for example, where there is a careless or deliberate inaccuracy within a company’s return but in addition the inaccuracy arises from the SAO not taking reasonable steps to ensure appropriate tax accounting arrangements.

The Customer Relationship Manager (CRM) or Caseworker must think about the SAO implications carefully if they find significant inaccuracies in the returns of a qualifying company. If the CRM or Caseworker thinks an SAO penalty is not appropriate, they must record their decision as to why this is.

Conversely, the CRM or Caseworker should be careful to resist any claim from a company that because we are not charging an SAO penalty we are accepting that an inaccuracy was made despite taking reasonable care. HMRC does not regard the two as being automatically linked for penalty purposes:

  • An inaccuracy in the accounts that attracts a penalty under Schedule 24 FA07 will not necessarily mean that the company does not have appropriate tax accounting arrangements.
  • The failure to have appropriate tax accounting arrangements that attracts a penalty under Schedule 46 FA09 will not necessarily mean that an inaccuracy will attract a penalty under Schedule 24 FA07.
  • And the fact that there are appropriate tax accounting arrangements in place will not necessarily result in reduction of a penalty for an inaccuracy under Schedule 24 FA07.

It will depend entirely on the circumstances of the case.

The SAO provisions are separate from other rules for the provision of returns and, therefore, from the penalising of the non-provision or late provision of returns. A late return is not of itself evidence that the SAO has failed the main duty. However, CRMs or Caseworkers might ask themselves whether the late return was caused by the lack of the necessary arrangements to satisfy the main duty.