Sales, Use and International Tax Activity Update - May 2009

UK Budget Heightens Financial Reporting Accountability

The recent UK budget included legislation that will require the Senior Accounting Officer of large companies to report to HMRC regarding the adequacy of their accounting systems for the production of accurate direct and indirect tax returns.

The Senior Accounting Officer will likely be the UK based person with overall responsibility for the company’s UK financial accounting systems. Companies will have to notify HMRC of the identity of the Senior Accounting Officer who will have responsibility for establishing accounting systems that are adequate for the purposes of accurate tax reporting. They will have to certify annually the adequacy of their accounting systems or specify the nature of any inadequacies and confirm that they have notified company auditors.

Careless or deliberate failure to comply with these new requirements can result in a penalty of £5,000 being imposed on the Senior Accounting Officer personally. Similarly, penalties will be imposed on the company as well.

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