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Employment tax responsibilities for Senior Accounting Officers

16 July 13 | By: Jas Jhooty

Introduction

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Senior Accounting Officer (SAO) legislation was introduced in 2009. Last year HMRC issued revised guidance which clarified that one of the main responsibilities placed on SAOs is to have a clear strategy for improving employment taxes compliance.

What is a Senior Accounting Officer

The 2009 legislation forced companies with a turnover exceeding £200 million to appoint a SAO who would be personally responsible for penalties imposed on their company for failure to comply to tax legislation. One of the biggest areas of risk that is re-emphasised in HMRC’s latest guidance, is in the area of employment taxes.

SAO responsibilities

The SAO has to:-

  • Ensure tax compliance with legal requirements
  • periodically check and test systems, controls, process flows and transactions
  • ensure that the introduction of new systems and processes, or changes to them, are supported by appropriate planning, risk assessment, implementation and evaluation activities
  • ensure the maintenance and retention of required records in whatever form
  • ensure staff and any third party to whom responsibilities are delegated are appropriately trained, have the necessary guidance, qualifications, knowledge and experience needed to carry out their functions
  • obtain relevant facts and advice to allow the company to make tax sensitive judgements

On top of this the SAO has to annually certify to HMRC of the steps they have taken to adhere to these responsibilities or else face personal penalties.

What does this mean in relation to employment taxes?

The SAO should be able to demonstrate: -

  • Periodic testing of outputs from key employment taxes processes
  • Implement technology-assisted solutions to automate processes around compliance especially around regular employment taxes requirements (eg Real Time Information)
  • Review, document and perform analysis of employment taxes controls across the business
  • Map key employment taxes processes and compile an annual compliance agenda
  • Identify and allocate roles and responsibilities for specific employment taxes tasks, and have a plan to remedy any gaps.
  • Assess skills and training needs and ensure relevant stakeholders have a programme of technical and professional learning for employment taxes

Demonstrating to HMRC that you have taken such steps should certainly be enough to mitigate against any personal penalties if a material tax error ever arises.

How emTax can help

As experts in all areas of employment tax, emTax consultants can provide invaluable assistance to SAOs to help them to meet their primary duties. Most importantly we offer an affordable alternative to the extortionate fees that the Big 4 accountancy firms charge for a similar service.

Having your employment tax systems and procedures audited by industry recognised employment tax experts will give SAOs peace of mind that they have done everything necessary to mitigate against any potential penalties they may face.

Please do not hesitate to contact us if you require our assistance in this or any other employment tax matter.

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