If you do nothing else before submitting the certificate...
|If you have not undertaken a review of your existing tax accounting arrangements, which is the case for 23% of the respondents to our recent poll, then it may be wise that as a minimum you have at least considered taking the following steps:|
Firstly, if the SAO previously made the decision not to undertake a review, check that they are still happy with this. It may be that they are now less certain as the prospect of the certificate draws closer, either due to issues that have arisen in the meantime or following discussions with others outside the business who have identified issues and are doing more. Furthermore, the SAO may be exiting the business or leaving their current role; will the new SAO take the same view? If the view has changed and further work is needed, this should be done now.
Secondly, if you and your SAO remain happy that no action is needed, you should document this decision and the rationale that supports it. This does not have to be a treatise on the art of tax management but does need to cover the sources of confidence that the SAO has drawn on in reaching the conclusion that they have taken ‘reasonable steps.’ Such sources might include: a strong compliance record with few/no disclosures, penalties etc; a low risk rating from HMRC; comfort provided by outsourced providers of tax; and a large, experienced and well resourced tax team. Your SAO should consider the facts before deciding that they are happy to sign-up to this view and it should be retained to evidence that appropriate consideration was given to the matter should an issue arise in the future. You may want to consider testing this thinking with HMRC to see if they would expect otherwise in your particular circumstances.
Finally, if there are issues you strongly suspect to be materially undermining your arrangements, you should develop a plan to address these and act on it promptly. It could not only expose the SAO to the financial and reputational penalties of an SAO ‘failure,’ but could also expose the business to penalties under the company penalty regime.