concerning SAO penalties<\/a>, the judge commented the regime shouldn\u2019t be applied on a one size fits all basis, and a distinction should exist between\u00a0businesses just over the qualifying company threshold and major companies\u00a0with large and sophisticated tax departments and systems.<\/p>\nDespite this, HMRC has insisted that the increased numbers of fines\u00a0aren\u2019t part of a crackdown, and it is merely applying the law. But according to Pinsent Masons\u2019 Jason Collins, who leads the law firm\u2019s tax, regulatory and litigation teams, there\u2019s been more active enforcement by HMRC.<\/p>\n
\u201cIt\u2019s not just the SAO regime where we’re seeing more active enforcement,\u201d said Collins. \u201cIt\u2019s across the board. HMRC\u00a0is definitely spending more time and money scrutinising the affairs of the UK\u2019s biggest businesses.\u201d <\/p>\n
Collins also noted that the upward trend in SAO fines is unlikely to yield thanks to HMRC\u2019s new off-payroll working rules (the rebranded term for IR35), which will be introduced in April 2020.<\/p>\n
IR35 makes make businesses liable for determining employment status and ensuring the right amount of tax is paid by contractors who operate through limited companies. Under the SAO regime, Collins said, executives could be fined if HMRC deems that they did not have adequate controls in place to prevent de facto employees being treated as contractors.<\/p>\n
\u201cSome corporates will be risk-averse and put people through payroll, likely against the contractors will,\u201d said Collins. \u201cBut the SAO regime will kick in when it’s not clear that the correct arrangements were in place.\u201d<\/p>\n
SAOs face the unenviable task of figuring out how many contractors the company is using, and whether their classification is correct. \u201cIt\u2019s not always easy for businesses to find out how many contractors they\u2019re using,\u201d said Collins.<\/p>\n
\u201cNot every contractor a business uses, for example, would go through central procurement. Some departments might just have third-parties they deal with directly. So an SAO is going to have a big task to get this under control.\u201d<\/p>\n
\u201cThat means proper, standardised tests being applied across the business, and I\u2019m sure, in the first few years will see quite a few mistakes being made.\u201d<\/p>\n<\/p><\/div>\n
\u00a0<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
HMRC doubles down on CFO tax crackdown as IR35 looms HMRC\u2019s targeting of CFOs and FDs under the SAO regime continues to grow, with official figures indicating a 22% increase in the number of senior finance executives fined for tax accounting failures. Introduced in 2009, the Senior Accounting Officer (SAO) guidance allows HMRC to issue penalties of \u00a35,000 for failure […]<\/p>\n","protected":false},"author":2,"featured_media":5770,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[25],"tags":[],"_links":{"self":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts\/3821"}],"collection":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/comments?post=3821"}],"version-history":[{"count":0,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts\/3821\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/media\/5770"}],"wp:attachment":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/media?parent=3821"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/categories?post=3821"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/tags?post=3821"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}