FDs of larger companies face personal tax fines
From July this year senior financial officers of larger companies must ensure that their tax accounting systems are accurate - or potentially face a personal fine.
Employee share option and share ownership schemes are key areas where companies can (and do) fall foul of the complex tax reporting and payment rules. Senior finance officers of larger companies will now have to provide a certificate each year as to whether their tax accounting systems are accurate, and if not, they must identify the problem and notify the auditors before the accounts are signed off.
If these requirements are not met then, in addition to any penalties that may arise for the company, financial officers are liable for personal fines of up to £5,000. There is a defence of reasonable excuse. However this regulation further underlines the need for companies to have formal administration procedures in place to ensure that any tax liabilities arising in relation to employee share schemes are properly handled and reported. For more information on RM2's share scheme audit and share scheme administration services, please call us on 020 8949 5522.
Note: for the purpose of this regulation, larger companies are those that do not qualify as medium sized by virtue of being able to satisfy two of the following three conditions: turnover of not more than £22.8 million, a balance sheet total of not more than £11.4 million and not more than 250 employees.