ECSH45813 | What is tested - financial soundness

HMRC’s fit and proper (F&P) technical guidance states that we consider financial soundness, including tax affairs, as an element of the F&P test.

When determining whether a business and all of its beneficial owners, officer and managers (BOOMs) are fit and proper, you will need to consider whether they are financially sound.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Factors to consider

To determine a person’s financial soundness, HMRC will have regard to any factors including, but not limited to:

(1) Whether the person has been the subject of any judgment debt or award, in the UK or elsewhere, that remains outstanding or was not satisfied within a reasonable period.

(2) Whether, in the UK or elsewhere, the person has made any arrangements with their creditors, filed for bankruptcy, had a bankruptcy petition served on them, been adjudged bankrupt, been the subject of a bankruptcy restrictions order (including an interim bankruptcy restrictions order), offered a bankruptcy restrictions undertaking, had assets sequestrated, or been involved in proceedings relating to any of these.

(3) Whether the tax affairs of the person or any business or other entity owned, controlled, or managed by them, are up to date, in that declarations or returns due from them have been made by the due date. HMRC will also have regard to whether any taxes, duties, levies, or similar sums due were paid by the due date. (This does not preclude the person being involved in requests for reconsiderations of rulings or decisions, appeals or similar proceedings in respect to matters of liability to taxes etc).

The fact that a person may be of limited financial means will not, in itself, affect their suitability to perform a role.