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Home / Blog / HMRC’s “Know your Customer” meetings will lead to more Senior Accounting Officers getting personally fined

HMRC’s “Know your Customer” meetings will lead to more Senior Accounting Officers getting personally fined

10 October 14 | By: Jas Jhooty

hmrc fine

The 30th September deadline date for Senior Accounting Officer (SAO) notifications and certificates has just passed for: -

  • companies whose year-end was 31st December &
  • PLCs with an accounting period end date of 31st March

The SAO of qualifying companies had to send HMRC a certificate stating whether or not their company had appropriate tax accounting arrangements in place. If not, it was the SAO’s responsibility to fully explain the shortcomings.

HMRC have allowed qualifying companies to make SAO certifications without auditing these statements for over 5 years now.

HMRC’s Know your Customer” meetings

HMRC’s new employer compliance drive under the guise of their “Know your Customer” (KYC) meetings was launched earlier this year and has initially focused on the very largest of businesses. These KYC meetings are aimed at examining whether or not a company’s existing employment tax governance procedures are sufficiently robust enough to justify the SAO certificates that have been previously declared by the SAO.

These KYC meetings are a mechanism by which HMRC are auditing the accuracy of previously declared SAO certifications with a view to personally fine the SAO up to £5,000 for failing to have appropriate tax accounting arrangements in place.

Very shortly these largest businesses will all have been seen and HMRC will be focusing their attentions on “smaller” business entities who fall within the remit of SAO legislation.

Effects of a fine

SAOs who are unfortunate enough to be deemed to have made incorrect previous years certifications as a result of their KYC meeting will not just suffer a financial penalty, but a serious blow to their reputation and future career prospects. We have heard of a few instances where personal fines have already been issued to SAOs.

What you should be doing now

If you are a SAO employer but are not deemed to be a large business by HMRC, you still have time to have your employment tax procedures reviewed with a view to upgrading them to reach the required standard to justify your previously returned SAO certificates. Doing this now and allowing time for any new procedures to bed in, will ensure that that you will have no problems at your inevitable KYC meeting date.

How emTax can help

Our consultants are all ex-HMRC Employer Compliance Inspectors and also have many years of experience of working as senior managers within the “Big 4” accountancy firms. The only difference between our employment tax advisory service and that which the “Big 4” offers is that our fees are a small fraction of what they charge.

Our consultants can assist you in the review of your current employment tax policies and procedures in preparation of your unavoidable KYC meeting. We offer value for money advice on all employment tax matters and specialise in conducting Benefits & Expenses policy reviews across all industry sectors. If any errors are discovered we can advise you on how to disclose these to HMRC to minimise any penalties.

We offer a free initial advisory visit where one of our consultants will go through our PAYE & NIC Audit questionnaire to try to identify any areas of weakness in your current employment tax procedures.

If you have any concerns about your upcoming KYC meeting, please do not hesitate to contact us by ringing us on 0345 548 3680 to find out how we can help.

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