SAO - Where we are today
The SAO legislation requires the SAO to fulfil two duties:
- Main duty - To take reasonable steps to ensure that the business establishes and maintains appropriate tax accounting arrangements; and
- Secondary duty - To submit an annual certificate stating whether the business had appropriate arrangements throughout the financial year and, if not, why not
For a UK plc with a calendar year-end, the first year to which these rules applied was the year ended 31 December 2010. Such a business will have now entered the second year of the regime with the year one certificate due to be submitted by 30 June 2011.
In our experience, we have found many of our clients are pretty confident about the robustness of their systems for tax purposes - this is backed up by a recent poll where 69% of respondents of 114 tax and finance managers confirmed that their SAOs are intending to file a clean certificate in the first year. We also understand, however, that there are aspects of tax management which do cause SAOs concern, particularly given the absence of a defined standard against which SAOs can benchmark their controls.
What follows is an examination of what we have learned about SAO from discussions with HMRC, our clients and others, both in terms of identifying these causes of concern and responding to them. Hopefully, the practical insights in this toolkit will help your SAO to achieve the appropriate level of confidence to sign on the dotted line in year one and the years to come.