Finance Bill

House of Commons

Session 2008 - 09
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Finance Bill

Finance Bill
Schedule 46 — Duties of senior accounting officers of large companies
338

      (2)
Omit paragraphs 9 and 10 of Schedule 3 (election to have amounts
mentioned in section 2(9)(b) and (c) spread).
      (3)
In consequence of the omission of paragraph 9 of Schedule 3, omit section
9(4).
      (4)
Omit paragraph 3 of Schedule 4 (allowable expenditure incurred before 13
5
November 1974).
      (5)
The repeals made by this paragraph have effect in relation to chargeable
periods beginning after 30 June 2009.
OTA 1983
2     (1)
OTA 1983 is amended as follows.
10
      (2)
Omit section 9(3) and paragraph 3 of Schedule 3 (receipts from contracts
made before 8 May 1982).
      (3)
In consequence of the omission of subsection (3) of section 9—
(a)
in subsection (2) of that section, for “subsections (3) and (4)”
substitute “subsection (4)”, and
15
(b)
in subsection (4)(b) of that section, for “subsections (1) to (3)”
substitute “subsections (1) and (2)”.
      (4)
Omit sections 13 and 14 and Schedule 5 (transitional provision for
expenditure incurred on or before 31 December 1983).
FA 1993
20
3     (1)
Schedule 20A to FA 1993 (as inserted by Part 1 of Schedule 33 to FA 2008) is
renumbered as Schedule 20B to that Act.
      (2)
In the following provisions, for “Schedule 20A” substitute “Schedule 20B”—
(a)
section 6(1A) of OTA 1975,
(b)
paragraph 15(9A) of Schedule 17 to FA 1980, and
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(c)
section 185(1ZA)(b) of FA 1993.
ICTA
4     (1)
In section 502(3A) of ICTA (interpretation of Chapter 5 of Part 12), omit the
words from “but” to the end.
      (2)
The repeal made by this paragraph has effect on and after 22 April 2009.
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Schedule 46
Section 92

Duties of senior accounting officers of large companies
Main duty of senior accounting officer
1     (1)
The senior accounting officer of a large company must take reasonable steps
to ensure that the company and each of its subsidiaries (if any) establishes
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and maintains appropriate tax accounting arrangements.

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Schedule 46 — Duties of senior accounting officers of large companies
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      (2)
The senior accounting officer of a large company must, in particular, take
reasonable steps—
(a)
to monitor the accounting arrangements of the company and its
subsidiaries (if any), and
(b)
to identify any respects in which those arrangements are not
5
appropriate tax accounting arrangements.
Explanation for auditors
2     (1)
This paragraph applies if a large company, or any of its subsidiaries, does
not have appropriate tax accounting arrangements at any time in a financial
year of the company.
10
      (2)
Before the report date, the senior accounting officer of the company must
provide the company’s auditor for the financial year with an explanation of
the respects in which the accounting arrangements of the company and its
subsidiaries (if any) are not appropriate tax accounting arrangements.
      (3)
“The report date” means the date on which the auditor’s report on the
15
company’s accounts for the financial year is finalised.
Certificate for Commissioners
3     (1)
The senior accounting officer of a large company must provide the
Commissioners with a Type A or Type B certificate for each financial year of
the company.
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      (2)
A Type A certificate is a certificate stating that the company and its
subsidiaries (if any) had appropriate tax accounting arrangements
throughout the financial year.
      (3)
A Type B certificate is a certificate—
(a)
stating whether the company, and each of its subsidiaries (if any),
25
had appropriate tax accounting arrangements throughout the
financial year,
(b)
giving an explanation of the respects in which the accounting
arrangements of the company and its subsidiaries (if any) were not
appropriate tax accounting arrangements, and
30
(c)
stating whether an explanation has been provided to the company’s
auditors in accordance with paragraph 2.
      (4)
The certificate must be provided—
(a)
by such means and in such form as is reasonably specified by an
officer of Revenue and Customs, and
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(b)
not later than the end of the period for filing the accounts for the
financial year (or such later time as an officer of Revenue and
Customs may have allowed).
Notifying Commissioners of name of senior accounting officer
4     (1)
For each financial year a large company must notify the Commissioners of
40
the name of each person who was its senior accounting officer at any time
during the year.
      (2)
The notification must be given—

Finance Bill
Schedule 46 — Duties of senior accounting officers of large companies
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(a)
by such means and in such form as is reasonably specified by an
officer of Revenue and Customs, and
(b)
not later than the end of the period for filing the accounts for the
financial year (or such later time as an officer of Revenue and
Customs may have allowed for providing the certificate for the
5
financial year under paragraph 3).
Penalty for failure to comply with main duty
5     (1)
This paragraph applies if a senior accounting officer fails to comply with
paragraph 1 at any time in a financial year.
      (2)
The senior accounting officer is liable to a penalty of £5,000.
10
      (3)
A person is not liable to more than one penalty under this paragraph in
respect of the same company and the same financial year.
Penalty for failure to provide explanation
6     (1)
This paragraph applies if a senior accounting officer fails to provide an
explanation to the company’s auditor in accordance with paragraph 2.
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      (2)
The senior accounting officer is liable to a penalty of £5,000.
Penalties for failure to provide certificate etc
7     (1)
This paragraph applies if a senior accounting officer—
(a)
fails to provide a certificate in accordance with paragraph 3, or
(b)
provides a certificate in accordance with that paragraph that
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contains a careless or deliberate inaccuracy.
      (2)
The senior accounting officer is liable to a penalty of £5,000.
      (3)
For the purposes of this Schedule, an inaccuracy is careless if the inaccuracy
is due to a failure by the senior accounting officer to take reasonable care.
      (4)
An inaccuracy in a certificate that was neither careless nor deliberate when
25
the certificate was given is to be treated as careless if the senior accounting
officer—
(a)
discovered the inaccuracy some time later, and
(b)
did not take reasonable steps to inform HMRC.
More than one senior accounting officer
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8     (1)
This paragraph applies if the identity of the senior accounting officer of a
company changes.
      (2)
If (but for this sub-paragraph) more than one person would be liable to a
penalty under paragraph 5 in respect of a financial year of the company,
only the one who became the senior accounting officer latest in the year is
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liable to such a penalty.
      (3)
If a person who is or has been the senior accounting officer of the company
complies, or purports to comply, with paragraph 2 in respect of a financial
year, no other person is liable to a penalty under paragraph 6 in respect of
that company and that financial year.
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Finance Bill
Schedule 46 — Duties of senior accounting officers of large companies
341

      (4)
If a person who is or has been the senior accounting officer of the company
complies, or purports to comply, with paragraph 3 in respect of a financial
year, no other person is liable to a penalty under paragraph 7 in respect of
that company and that financial year.
      (5)
A person who is replaced as the senior accounting officer of the company
5
before the last day for compliance with paragraph 2 or 3 in respect of a
financial year is not liable to a penalty under paragraph 6 or 7(1)(a) for
failing to comply with that paragraph in respect of that company and that
financial year.
Penalty for failure to notify Commissioners of name of senior accounting officer
10
9
A large company is liable to a penalty of £5,000 if it fails to notify the
Commissioners of the name of its senior accounting officer or officers in
accordance with paragraph 4.
Reasonable excuse
10    (1)
Liability to a penalty for a failure to comply with this Schedule does not arise
15
if the senior accounting officer or large company satisfies HMRC or (on an
appeal notified to the tribunal) the tribunal that there is a reasonable excuse
for the failure.
      (2)
For the purposes of this paragraph—
(a)
an insufficiency of funds is not a reasonable excuse unless
20
attributable to events outside the person’s control,
(b)
where the person relies on any other person to do anything, that is
not a reasonable excuse unless the first person took reasonable care
to avoid the failure, and
(c)
where the person had a reasonable excuse for the failure but the
25
excuse has ceased, the person is to be treated as having continued to
have the excuse if the failure is remedied without unreasonable
delay after the excuse ceased.
Assessment of penalties
11    (1)
Where a senior accounting officer or a large company becomes liable for a
30
penalty under this Schedule—
(a)
HMRC may assess the penalty, and
(b)
if they do so, they must notify the officer or company liable for the
penalty.
      (2)
An assessment of a penalty under this Schedule for a failure in respect of a
35
financial year, or an inaccuracy in a certificate for a financial year, may not
be made—
(a)
more than 6 months after the failure or inaccuracy first comes to the
attention of an officer of Revenue and Customs, or
(b)
more than 6 years after the end of the period for filing the accounts
40
for the financial year.
Appeal
12    (1)
A person may appeal against a decision of HMRC that a penalty is payable
by that person.

Finance Bill
Schedule 46 — Duties of senior accounting officers of large companies
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      (2)
Notice of an appeal must be given—
(a)
in writing,
(b)
before the end of the period of 30 days beginning with the date on
which the notification under paragraph 11 was issued, and
(c)
to HMRC.
5
      (3)
Notice of an appeal must state the grounds of appeal.
      (4)
On an appeal that is notified to the tribunal, the tribunal may confirm or
cancel the decision.
      (5)
Subject to this paragraph and paragraph 13, the provisions of Part 5 of TMA
1970 relating to appeals have effect in relation to appeals under this
10
Schedule as they have effect in relation to an appeal against an assessment
to income tax.
Enforcement of penalties
13    (1)
A penalty under this Schedule must be paid—
(a)
before the end of the period of 30 days beginning with the date on
15
which the notification under paragraph 11 was issued, or
(b)
if a notice of appeal against the penalty is given, before the end of the
period of 30 days beginning with the date on which the appeal is
determined or withdrawn.
      (2)
A penalty under this Schedule may be enforced as if it were income tax
20
charged in an assessment and due and payable.
Power to change amount of penalties
14    (1)
If it appears to the Treasury that there has been a change in the value of
money since the last relevant date, they may by regulations substitute for the
sums for the time being specified in paragraphs 5, 6, 7 and 9 such other sums
25
as appear to them to be justified by the change.
      (2)
In sub-paragraph (1), in relation to a specified sum, “relevant date” means—
(a)
the date on which this Act is passed, and
(b)
in relation to that sum, each date on which the power conferred by
that sub-paragraph has been exercised.
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      (3)
Regulations under this paragraph do not apply to—
(a)
a failure that occurs in respect of a financial year of a company that
begins before the date on which they come into force, or
(b)
an inaccuracy in a certificate that was provided to HMRC in respect
of such a financial year.
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Application of provisions of TMA 1970
15
Subject to the provisions of this Schedule, the following provisions of TMA
1970 apply for the purposes of this Schedule as they apply for the purposes
of the Taxes Acts—
(a)
section 108 (responsibility of company officers),
40
(b)
section 114 (want of form), and
(c)
section 115 (delivery and service of documents).

Finance Bill
Schedule 46 — Duties of senior accounting officers of large companies
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Meaning of “appropriate tax accounting arrangements”
16    (1)
“Appropriate tax accounting arrangements” means accounting
arrangements that enable the liability to taxes and duties of the company
and its subsidiaries (if any) to be calculated accurately.
      (2)
“Accounting arrangements” includes arrangements for keeping accounting
5
records.
      (3)
“Taxes and duties” means taxes and duties the collection and management
of which is the responsibility of the Commissioners.
Meaning of “large company”
17    (1)
“Large company”, in relation to a financial year, means a company that—
10
(a)
does not qualify as small or medium-sized for the purposes of Part
15 of the Companies Act 2006 (accounts and reports) in relation to
that year (see sections 383 and 465 of that Act), and
(b)
is not, throughout that year, a member of a group headed by another
company that satisfies paragraph (a).
15
      (2)
The Treasury may by regulations provide that a company of a description
specified in the regulations is not a large company for the purposes of this
Schedule.
Meaning of “senior accounting officer”
18
“Senior accounting officer”, in relation to a company, means the director or
20
officer of the company who has overall responsibility for the company’s
financial accounting arrangements.
Regulations
19    (1)
Regulations under this Schedule are to be made by statutory instrument.
      (2)
A statutory instrument containing regulations under this Schedule is subject
25
to annulment in pursuance of a resolution of the House of Commons.
Other definitions
20
In this Schedule—
“auditor” means an auditor appointed for the purposes of the
Companies Act 2006;
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“auditor’s report” means the report that the auditor is required to make
to the company’s members under the Companies Act 2006;
“the Commissioners” means the Commissioners for Her Majesty’s
Revenue and Customs;
“company” means a company within the meaning of the Companies
35
Act 2006;
“financial year”, in relation to a company, has the same meaning as in
the Companies Act 2006 (see section 390 of that Act);
“group” has the same meaning as in Part 15 of the Companies Act 2006
(accounts and reports) (see section 474 of that Act);
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“HMRC” means Her Majesty’s Revenue and Customs;

Finance Bill
Schedule 47 — Amendment of information and inspection powers
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“period for filing”, in relation to accounts, has the same meaning as in
the Companies Acts (see section 442 of the Companies Act 2006);
“subsidiary” has the same meaning as in the Companies Acts (see
sections 1159 and 1160 of, and Schedule 6 to, the Companies Act
2006);
5
“tribunal” means the First-tier Tribunal or, where determined by or
under Tribunal Procedure Rules, the Upper Tribunal.
Schedule 47
Section 94

Amendment of information and inspection powers
1
Schedule 36 to FA 2008 (information and inspection powers) is amended as
10
follows.
2     (1)
Paragraph 3 (approval etc of taxpayer notices and third party notices) is
amended as follows.
      (2)
After sub-paragraph (2) insert—
   “(2A)
An application for approval under this paragraph may be made
15
without notice (except as required under sub-paragraph (3)).”
      (3)
In sub-paragraph (3)(c), after “is” insert “to be”.
3     (1)
Paragraph 5 (power to obtain information and documents about persons
whose identity is not known) is amended as follows.
      (2)
After sub-paragraph (3) insert—
20
   “(3A)
An application for approval under this paragraph may be made
without notice.”
      (3)
In sub-paragraph (4), for “give its approval for the purposes of” substitute
“approve the giving of a notice under”.
4
In paragraph 6 (notices), insert at the end—
25
    “(4)
A decision of the tribunal under paragraph 3, 4 or 5 is final (despite
the provisions of sections 11 and 13 of the Tribunals, Courts and
Enforcement Act 2007).”
5     (1)
Paragraph 10 (power to inspect business premises etc) is amended as
follows.
30
      (2)
In sub-paragraph (3), in the definition of “business assets”, for “, excluding
documents” substitute “(but see sub-paragraph (4))”.
      (3)
After that sub-paragraph insert—
    “(4)
For the purposes of this Schedule, “business assets” does not
include documents, other than—
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(a)
documents that are trading stock for the purposes of
Chapter 11A of Part 2 of ITTOIA 2005 (see section 172A of
that Act), and
(b)
documents that are plant for the purposes of Part 2 of CAA
2001.”
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