Details of the Schedule
2.Paragraph 1 establishes that the senior accounting officer of a qualifying company must take reasonable steps to ensure that the company and any subsidiaries establishes and maintains appropriate tax accounting arrangements. Also that the senior accounting officer takes reasonable steps to monitor those arrangements and identify any respects in which they are not appropriate. This is referred to as the ‘main duty’.
3.Paragraph 2 requires the senior accounting officer to certify to HMRC either:
that the company any its subsidiaries had appropriate tax accounting arrangements throughout the financial year; or
stating whether it did; giving an explanation of the respects in which the arrangements are not appropriate, and stating whether an explanation has been provided to the company auditors.
The paragraph also prescribes the form this certificate should take and sets a time limit for submission of the certificate: not later than the end of the period for filing the company’s accounts for the year concerned, unless, a later date is prescribed by HMRC.
4.Paragraph 3 requires a large company to notify HMRC of the name of anyone who was its senior accounting officer at any time during the year and how and by when this should be done.
5.Paragraph 4 provides for a penalty of £5,000 on the senior accounting officer for a failure to comply with the ‘main duty’. This penalty is, however, limited to once per year per company.
6.Paragraph 5 provides for a penalty of £5,000 on the senior accounting officer for a failure to provide the certificates required or for providing a certificate that contains a careless or deliberate inaccuracy. It is also provided that where a certificate is made neither carelessly nor deliberately, it will be treated as such if the senior accounting officer discovers the inaccuracy and does not take reasonable steps to notify HMRC.
7.Paragraph 6 explains how the penalties apply if there were more that one senior accounting officer during the year. Effectively this makes only one person who was senior accounting officer liable to a penalty being the last in post to have failed in relation to the matter being penalised.
8.Paragraph 7 imposes a penalty on the company if it fails to notify HMRC of the name of its senior accounting officer.
9.Paragraph 8 provides for an escape from any of the penalties for failures under this section where there is reasonable excuse for the failure.
10.Paragraph 9 sets out the arrangements and time limits for assessing penalties.
11.Paragraph 10 sets out the arrangements and time limits for appealing against any penalty under this section.
12.Paragraph 11 sets out when penalties must be paid and provides for any penalty under this section to be enforced as if it were income tax charged in an assessment.
13.Paragraph 12 provides for the amount of the penalties under this section to be revalorised in Regulations to take account of changes in the value of money.
14.Paragraph 13 applies certain relevant provisions of the Taxes Management Act 1970 to the provisions of this section.
15.Paragraph 14 sets out what is meant by ‘appropriate tax accounting arrangements’. It also lists those taxes and duties to which this Schedule will apply.
16.Paragraph 15 sets out what is meant by a ‘qualifying company’ and provides for HM Treasury regulations to exclude, but not add to, the types of company to be considered ‘qualifying companies’ for the purpose of these provisions.
17.Paragraph 16 sets out what is meant by ‘senior accounting officer’.
18.Paragraph 17 concerns the arrangements for making regulations under this Schedule.
19.Paragraph 18 provides the meaning of a variety of terms included throughout this Schedule.
