HMRC Escalates Fines On Directors

The number of fines issued by HMRC has risen by 150 per cent over the last five years, with the majority of directors fined working in the finance sector.

HM Revenues and Customs fined 115 finance directors  last year under the Senior Accounting Officer (SAO) regime, according to a Pinsent Masons report.

The SAO, introduced in 2009, allows HMRC to issue penalties of £5,000 to senior executives who fail to account for a company’s income and expenses.

Under the SAO regime, a company must designate one of its finance directors to act as senior accounting officer, who takes full responsibility for the company’s tax accounting arrangements.

Since the recent controversy over the Paradise Papers and the parliamentary expense scandal back in 2009, it has become increasingly important to keep people who hold power, in check.

Jason Collins, partner at Pinsent Masons, said, “HMRC is going after the most senior people it can, without exceptions. Putting finance directors in the firing line is a definite escalation of HMRC’s tactics.

A HMRC spokesperson said it was crucial that senior accounting officers took responsibility for their organisation’s accounting systems, adding that, “HMRC will impose penalties where they fall short or fail to provide the relevant documentation”.

The Credit Protection Association strongly supports any action to keep big businesses in check. HMRC’s new penalties should encourage directors to keep a closer eye on their finances and watch where their money is going. At CPA we urge our Members to keep good paperwork and take responsibility for their accounts systems, this should prevent any problems with payment later down the line. 

 The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!