HMRC recently announced a number of updates to the Senior Accounting Officer (SAO) guidance. These changes are largely a clarification of HMRC’s existing practices in respect to the SAO regime and should not come as a huge surprise to companies falling within the rules. However, it is a timely reminder of the importance of due diligence, process management and review to ensure compliance.

Since the SAO regime was introduced in 2009, HMRC has required ‘qualifying companies’ – broadly UK incorporated companies who either alone or when aggregated with other UK companies have turnover of more than £200m or a balance sheet total of more than £2bn – to appoint an SAO.

This individual is responsible for ensuring the company maintains robust tax accounting systems, allowing tax liabilities to be recorded and calculated accurately. The SAO must submit a certificate to HMRC each financial year which outlines whether the company has kept adequate tax accounting arrangements, and if not, the reasons for any shortcomings.