SAOG18100 - In what circumstances is a penalty chargeable: overview
We expect there to be strong compliance with the Senior Accounting Officer (SAO) provisions. HMRC’s Large Business Customer Compliance Managers (CCMs) and Mid-sized Business Caseworkers will consider this as part of their overall risk assessment of companies. However, if there are failures, Schedule 46 FA 2009 does provide for
- a penalty chargeable on a qualifying company for failure to notify the name of its SAO within certain timescales, see SAOG18300, and
- two separate penalties chargeable on an SAO for
A penalty will not be charged on a person if they have a reasonable excuse for the failure to comply with the legislation, see SAOG20000.
Whilst a person will be liable to an SAO penalty in the circumstances described above, HMRC has discretion whether to assess that penalty. That discretion is conferred by Paragraph 9(1)(a) Schedule 46 FA 09, which states that if an SAO or a company becomes liable to a penalty, HMRC ‘may assess’ it.
A decision to assess a penalty on an SAO or company should take account of all relevant facts, including the nature of the failure and the inherent compliance risk of the business concerned. Further discussion of situations where it would be appropriate not to assess a penalty are outlined at SAOG18550.
A CCM or a Caseworker must record the reasons behind any consideration of whether or not to assess a penalty, and ensure that this is stored for future reference.
If you conclude that it would be appropriate to exercise HMRC’s discretion to not assess a penalty, you should explain to the customer:
- why they were liable to a penalty in the first place;
- the factors you have taken into account in considering whether or not to assess the penalty;
- your reasons for exercising discretion to not assess the penalty;
- the steps they need to take to fully comply in future.
A penalty is chargeable on the person responsible for the failure or inaccuracy - either the company or the SAO. See SAOG18700 for guidance where there is more than one SAO for a financial year.
In a group situation, we may not be able to charge more than one penalty per SAO or group for failure across all the group companies. The rules for this situation can be complicated and you can find examples at SAOG18300 to SAOG18600. In cases of difficulty, CCMs or Caseworkers should contact their nominated business contact for advice.
A CCM or a Caseworker must discuss any penalty for a failure by an SAO only with that SAO or their authorised agent, see SAOG18800. Under most circumstances such penalties should not be discussed with the company.
See SAOG19000 for guidance on what to do when a CCM or a Caseworker thinks a penalty may be chargeable.
FA09/SCH46/PARA4
FA09/SCH46/PARA5
FA09/SCH46/PARA7
FA09/SCH46/PARA8
FA09/SCH46/PARA9(1)(a)