Senior Accounting Officer sign off – who’s in the firing line?


Many of the UK’s largest companies are concerned about the impact of the Finance Bill 2009 on the duties of senior accounting officers (SAOs), according to research from Deloitte.

Clause 92 of the bill states that senior accounting officers must take reasonable steps to ensure the company and its subsidiaries establish and maintain appropriate tax accounting arrangements.

But companies are concerned that the clause includes a power to impose penalties on both senior accounting officers and companies who fail to comply with this requirement.

Deloitte’s survey found that 85 per cent of FTSE 100 firms will try to limit the personal liability of SAOs by paying for any penalties incurred on their behalf.

Despite this, 58 per cent of FTSE 100 companies and 64 per cent of FTSE 250 companies believe incurring a penalty would have a detrimental impact on an SAO’s career and reputation.

Eighty-seven per cent of FTSE 100 firms believe the new measures will cost between £50,000 and £250,000 to implement.

During the Commons debate on Clause 92, Stephen Timms, Financial Secretary to the Treasury, announced the intention to limit the measures ‘to those companies with a large business relationship and a CRM reflecting that’. This will broadly affect companies with a turnover of £200million.

Richard Blackwell, tax partner at Deloitte in Cambridge, said: “This would mean that a significant number of companies and groups that would have been included, based on the conditions contained in the draft legislation, would fall outside the provisions, at least for now.

“The concerns of the companies surveyed are contrary to HM Revenue & Customs’ (HMRC) view that the measures will ‘impose no significant burden on those companies that have adequate accounting systems’.

“HMRC has acknowledged in the Impact Assessment for the legislation that companies which do not have adequate systems in place will need to invest in setting them up.

“We expect the additional costs associated with implementing these new systems to receive a lukewarm reception from the business community, particularly in the face of already challenging economic conditions.”

The new measures are set to come into effect for tax returns (including VAT and employment taxes) for financial years starting on or after the date of Royal Assent in July so companies with a July year-end will be within the new rules from 1 August 2009.

The majority of companies (which have December year ends) will have until 1 January 2010 to identify and correct any weaknesses.

“The other issue which many companies will encounter is that different taxes are managed by different business areas, which adds to the complexity of certification by the SAO,” said Mr Blackwell.

“The SAO (likely to be the finance director) will be required to personally certify that the company is in compliance and will be personally liable to penalties for a failure to meet this and/or the associated reporting obligations.

“HMRC’s view is that this will impose no additional burden for ‘responsible’ companies, and they have said that they are steadfast on the principle and therefore only willing to talk about the application.”


The Deloitte Cambridge office comprises 8 Partners and over 250 staff who deliver a full range of professional services to the East Anglian region. As well as focussing on the life sciences and technology sectors for which the region has become so renowned, the office has long standing specialisms in other sectors including the professions, consumer business, food and agribusiness.

Deloitte LLP