UK: Finance Act 2009 explanatory notes published

Explanatory notes for the Finance Act (2009) have been published: see here (html) and here (pdf). The notes provide a brief explanation of the new duty imposed on the senior accounting officer (or officers) of large companies by Section 93 and Schedule 46:

Large companies make a major contribution to the Exchequer. Inadequate tax accounting arrangements within such companies (or groups) can lead to misreporting of tax liabilities of very large amounts. Currently, there is no legal obligation on any particular director or company officer to ensure that the company has appropriate tax accounting arrangements. This section and Schedule will make the senior accounting officer of a company personally responsible for doing so. Ensuring appropriate tax accounting arrangements are in place is no more than compliant companies will be doing already. The requirement on senior accounting officers to take reasonable steps to ensure appropriate tax accounting should in most instances merely underpin that good practice. Where large companies have not established appropriate tax accounting arrangements to enable accurate tax reporting, tax is at risk. Senior accounting officers of such companies will be required by this section to take appropriate action to remedy that situation.

Section 93 and Schedule 46 provide that senior accounting officers of qualifying companies are required to take reasonable steps to ensure that the company establishes and maintains appropriate tax accounting arrangements. Qualifying companies must notify HMRC of the name of the senior accounting officer. The section includes a power to impose penalties on both senior accounting officers and companies who fail to comply with these requirements. The change has effect in relation to financial years beginning on or after the day this Act is passed.