SAOG17500 | Tax compliance risk management process for customers managed by Mid-sized Business: response to the non-provision of a certificate

The Mid-sized Business Customer Engagement Team (CET) may expect a certificate but become aware that one has not been provided. This expectation will arise where the company has already notified details of its Senior Accounting Officer (SAO) or, where it has not done so, where the CET has obtained their own information and/or has held previous discussions with the company, but an SAO does not then provide a timely certificate.

Once an apparent failure to provide a certificate comes to the attention of a HMRC officer, the CET must:

• satisfy themselves that a certificate should have been provided,

• consider whether a penalty may be chargeable on the appropriate SAO, see SAOG18500, and if so, follow the guidance at SAOG19000 to take the appropriate penalty action, as soon as possible, and

consider this apparent failure as part of the risk assessment of the company/group. If the SAO declines to submit a certificate after a penalty for failing to provide a certificate by the time limit is incurred, the CET or Caseworker must consider the case carefully. It may be that the SAO does not want to make a statement in a certificate that could lead the CET or Caseworker to conclude where and why they have failed in the main duty, see SAOG14000. Whether or not a penalty is issued for failure to provide a certificate, we will still require the information that it should contain. The CET or Caseworker must ensure that the SAO is aware of this and that the late provision of a certificate or the ongoing failure to provide the required information will be taken into account in assessing our consideration of the risk of the company or group. The absence of the certificate and the risk consequences should also be made clear to the company.

WARNING: When the CET or Caseworker discusses the absence of the certificate with the company or group they must not discuss whether or not we are considering raising, or have raised, a penalty on the SAO, see SAOG18800.

If, despite this the certificate, or the information that would have been provided by it, is still not forthcoming the CET or Caseworker must contact their nominated business contact for advice on how to proceed.

If it appears that a penalty may be due it is important that the CET or Caseworker follows the penalty procedure as soon as the failure has come to the attention of an officer of HMRC. This is because there is a restrictive time limit, see SAOG21200, for taking penalty action. Following the ordered steps set out at SAOG19000 the CET or Caseworker must discuss the potential penalty situation with their Assistant Director and obtain the approval of the Penalties Consistency Panel, before then explaining to the SAO (separately from other risks being addressed to the company/group) that

• there has been a failure and

• they intend to charge a penalty.

A failure ‘comes to the attention’ of a HMRC officer when that officer knows that there has been a failure and they know who the SAO is, see SAOG17300. So, for example, if the CET receives no certificate and only appreciates this on the day when they carry out a risk assessment, then if the company has notified HMRC of the name of the SAO that is the date when the failure comes to their attention.

The failure of an SAO in providing a certificate happens on the day after the time limit for providing the certificate expired.