News
Raymond Doherty 7 Mar 2017 02:53pm

HMRC cracks down on big business FDs

The number of penalties for tax accounting failures issued to financial directors at large UK businesses hit a record high last year

A total of 181 fines were handed out under HMRC’s Senior Accounting Officer (SAO) regime in 2015/16, an increase of 17% on the previous year, according to law firm Pinsent Masons.

SAOs of qualifying large companies (broadly with UK group turnover in excess of £200m) are required to provide personal certification that their accounting systems are capable of delivering accurate tax reporting across all major taxes.

The rules, introduced in 2009, were intended to provide increased transparency of the tax affairs of large companies in the boardroom.

No penalties were issued in the first three years of implementation but they have increased significantly each year since, from 46 in 2012/13 to 73 in 2013/14 and 155 in 2014/15.

“The SAO regime signals the new enthusiasm at HMRC for holding individual senior executives to account for any wrongdoing or non-compliance.”

“The number of penalties continues to rise and signals a hard-line approach by the Revenue,” Jason Collins, partner and head of tax at Pinsent Masons said.

The Revenue has raised an extra £450m through corporation tax investigations into small businesses in the past year. Over the same period the yield from probes into big businesses’ corporation tax affairs has fallen.

Overall, HMRC collected £2.6bn in extra corporation tax last year, down 25% from the £3.5bn collected the year before, according to research from UHY Hacker Young.

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