The Senior Accounting Officer (SAO) legislation requires Senior Accounting Officers to establish and maintain appropriate tax accounting arrangements to allow tax liabilities to be calculated accurately in all material respects.
New leadership in HMRC’s SAO team, the introduction of BRR+ and an increasing focus on tax risk governance and strategy all mean that the approach busineses take to their SAO compliance is under increased scrutiny by HMRC.
Businesses are being asked more frequently to provide information regarding the roles and responsibilities for finance and tax functions, the design and interactions of systems, the documenting of tax relevant processes and controls, the use of internal audit and the maintenance of tax risk registers. In essence, businesses must demonstrate how all of these elements support the SAO in fulfilling the ‘main duty’ legal requirement.
Businesses caught by the SAO legislation cannot afford to take an informal or ad-hoc approach to managing their tax relevant data. You need to consider your tax operating model and ensure there is real rigour around it. This includes appropriate governance and documented processes and controls that are implemented in a sustainable manner and kept under continuous review.
There is no ‘one-size fits all’ approach. SAOs need to be able to demonstrate that their in-year governance and the process underpinning their post year-end assessment of their tax accounting arrangements meet the requirements of the legislation.
SAO compliance assurance: helping you sleep at night
If you are the SAO for your firm, you are personally liable for any failure to meet your duties. You can rely on us to advise and support you, and your company, on all aspects of Senior Accounting Officer compliance. Our SAO assurance services will be tailored to suit your specific needs. Our full-service offering is centred around our Tax Risk Assurance Matrix (TRAM) methodology. We incorporate a classic internal audit approach and use a programme of workshops and testing.
Alternatively, if you are managing your SAO compliance in-house, you can use our SAO Healthcheck to benchmark the appropriateness of your SAO compliance process and the underlying documentation in place to support your SAO filing position.
Please get in touch to discuss how we can support your SAO compliance. Alternatively, you can find more information about each of our offerings in the flyers below.
What do I need to know about the SAO regime?
UK incorporated companies that standalone, or as members of a group, have total UK aggregated turnover of greater than £200 million and/or a relevant balance sheet total of more than £2 billion for the preceding financial year are qualifying companies for the purposes of the SAO regime.
Qualifying companies are required to nominate an SAO and formally notify HMRC who the SAO is for each financial year that the company is qualifying.
The SAO is required to ‘take reasonable steps to ensure that the company establishes and maintains appropriate tax accounting arrangements.’ In addition, the SAO must provide a signed certificate to HMRC stating whether the company had appropriate tax accounting arrangements in place for each qualifying financial year.