Senior Accounting Officer services

The Senior Accounting Officer (SAO) regime is a key part of any large business’s tax governance and risk management framework. It is not just a compliance requirement; it can be a valuable tool to improve tax processes and systems.
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The SAO regime aims to ensure that companies have adequate systems in place so that the correct tax liabilities are reported to HMRC.

Qualifying companies must appoint a director or officer with overall responsibility for the company’s financial accounting arrangements. The main role of the SAO is to take reasonable steps to establish and maintain appropriate tax accounting arrangements. Penalties for failure to comply can be levied on the SAO personally, as well as on the company. Qualifying companies must notify HMRC of their nominated SAO each year.

Arrangements are considered appropriate if they enable the company’s relevant UK tax liabilities to be calculated accurately in all material respects.

The SAO must prepare and submit an annual certificate indicating whether or not the entity has established and maintained appropriate tax accounting arrangements during the financial year.

Given the potential personal liability for SAOs, it is important that they comply fully with the requirements and ensure documentation and evidence support this.

They can face a variety of common challenges:

  • Changes in group structure
  • Changes in personnel
  • Deficiencies in existing controls
  • Reliance on non-tax staff
  • Manual processes and data input
  • Inadequate evidencing and testing of processes

Keeping you SAO compliant

Whether your business is approaching the size limits for SAO for the first time or has been within the regime for years, our SAO team can support you:

  • Preparing or reviewing notifications and certificates
  • Identifying qualifying companies and relevant periods covered by the regime
  • Carrying out SAO health checks to review existing tax controls and processes and evaluate risks and opportunities
  • Using existing documentation and controls to provide bespoke and practical control recommendations
  • Implementing SAO governance frameworks, including preparation of detailed process maps of key tax processes
  • Introducing methods to track compliance and serve as documentary evidence for HMRC. We can help produce SAO checklists or implement technology to evidence that processes have been followed
  • This can also be linked to the Business Risk Review process for large corporates
  • Helping you understand how any errors have occurred, advising on process changes to ensure they are not repeated and disclosing to HMRC as necessary

Frequently asked questions about the Senior Accounting Officer

The SAO regime requires qualifying companies to demonstrate that their tax accounting arrangements are robust and appropriate. The regime targets an entity’s tax governance and systems with a view to ensuring correct tax reporting and payment.

A qualifying company must appoint an SAO who, in the company’s reasonable opinion, has overall responsibility for the company’s financial accounting arrangements. Many businesses choose their Chief Financial Officer.

A UK company is a qualifying company for an accounting period if, in the previous financial year, the company or the UK group had a turnover of more than £200 million and/or a balance sheet total of more than £2 billion. Dormant companies also fall within the SAO rules.

The SAO regimes apply to the tax accounting arrangements for the following taxes:

  • Corporation tax, including quarterly instalment payments
  • Value added tax
  • Pay As You Earn
  • Insurance premium tax
  • Stamp duty land tax
  • Stamp duty reserve tax
  • Petroleum revenue tax
  • Customs duties
  • Excise duties, including air passenger duty
  • Bank levy

The deadline for notifying HMRC of the nominated SAO and submission of the annual certificate is the same as the deadline for filing the company’s accounts for the financial year at Companies House. For public limited companies, this is six months after the end of the accounting period. For other companies, it is nine months after the end of the accounting period.

There are three types of penalty under the SAO regime: 

  • Failure to notify HMRC of the SAO’s name by the deadline – a penalty of £5,000 is chargeable on the company for its financial year
  • Failure to take reasonable steps to ensure the company establishes and maintains appropriate tax accounting arrangements – a penalty of £5,000 is chargeable on the SAO for the financial year
  • Failure to provide a certificate to HMRC for a financial year within the deadline or if the information is deemed to contain a careless or deliberate inaccuracy – a penalty of £5,000 is chargeable on the SAO for the financial year