The SAO regime requires certain UK companies to formally appoint a senior individual who takes responsibility for the company’s tax accounting arrangements. Each year, this person must confirm to HMRC whether the systems in place were adequate throughout the financial year.

The aim is to strengthen internal governance and ensure that tax systems are not overlooked. Where companies or individuals fail to meet the requirements, HMRC can impose financial penalties.

All UK incorporated companies, or those that are members of a group, whereby the group financial results disclose at least:

• £200m turnover or more; and / or
• A balance sheet total of more than £2bn

For the previous financial year.

Where a UK company is part of the group, the UK incorporated results must be aggregated and determined whether the above thresholds are breached.

Practically, this threshold is easily breached where a UK company is part of a worldwide group where other UK incorporated entities are included and promotes the need for groups to consistently communicate with each other.

The SAO is expected to take reasonable steps to ensure the company’s tax accounting systems are adequate. This includes reviewing the processes used to calculate, report, and pay all relevant taxes, and identifying any areas where improvements are needed.

An annual certificate must be submitted to HMRC confirming whether the arrangements were adequate or not. If there are deficiencies, a disclosure will need to be made along with a brief explanation of what actions are being taken to resolve them.

The submission deadline for the SAO certification (and SAO nomination) is aligned with the statutory financial statements filing requirement.

HMRC does not provide a rigid checklist, but it does expect tax systems to be effective, appropriate for the size and complexity of the business, and properly documented.

In practical terms, this means there should be clear processes in place for identifying and managing all relevant taxes, such as corporation tax, VAT, PAYE, NIC, CIS, and customs duties. There should be internal controls, a clear chain of review, and evidence that tax compliance is integrated into the company’s wider financial processes.

Using group-level or global systems alone is not sufficient. UK-specific oversight and documentation must be in place to demonstrate compliance.

To comply with Senior Accounting Officer (SAO) requirements, groups must regularly review their processes, controls, and technology to ensure they remain robust and fit for purpose. A key part of this is maintaining a comprehensive risk register that identifies all relevant taxes applicable to the business. This register should be updated regularly and include documentation on how each tax is managed, providing clear evidence of ongoing evaluation and oversight.

Crucially, SAOs must be confident in assigning appropriate risk ratings to these processes. This requires a strong depth of experience to effectively benchmark the group’s approach and ensure it aligns with best practices.

We collaborate closely with companies to help them meet their SAO obligations with confidence. Our support includes:

• Assessing whether a company falls within scope and timelines for reporting,
• Implementing effective tax risks registers for handling by local teams,
• Reviewing tax systems and controls,
• Assistance in preparing SAO documentation and disclosures to HMRC.

We also offer tailored guidance for individuals stepping into the SAO role for the first time, ensuring they understand their responsibilities and how to manage them effectively.