Press Release
23 April 2009
New Budget tax measure putting finance directors on the hook will increase costs for UK plc
• Personal liability will increase compliance costs
• UK equivalent of Sarbanes Oxley
New rules aimed at making finance directors liable for their companies’ tax payments will be introduced in the Finance Bill 2009 (http://www.hmrc.gov.uk/budget2009/bn62.pdf)
The rules will require UK Finance Directors to certify annually that accounting systems are accurate for the purposes of tax reporting. Finance Directors and companies will be liable to penalties for a careless or deliberate failure to meet the obligations. The Government expects to collect £40-50 million a year in tax from this measure.
Jason Collins, Partner, in McGrigors Tax Disputes and Investigations practice, comments (020 7054 2737):
“This is likely to lead to a lot more expenditure on “administrative burdens” because, whatever HMRC might say, company officers will doubtless want thorough sign-off from their accounting or tax advisory firms that the systems in question are in order before providing the necessary certification to HMRC.”
“This is in effect the UK equivalent of Sarbanes Oxley, which was widely criticised as leading to a sharp fall in the number of companies listing in the US. The Treasury expects to rake in an extra £40-50 million a year in tax from this measure. That’s a fairly paltry sum when you consider the significant cost this is going to place on UK plc.”
Andy Peat
Business Development Director
Telephone: +44 (0)20 7054 2710
Mobile: +44 (0)7894 835 386
Email: andy.peat@mcgrigors.com
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