Firms Need to Work Out to Comply with Tax Returns Reporting Laws
The latest survey released by Deloitte shows a less lively activity of companies in UK regarding their compliance with new regulations on reporting tax returns.
Results of the survey provide trends of how well UK firms are complying with the Senior Accounting Officer (SAO) legislation which took effect following the Royal Assent on July 21, 2009. It requires senior financial officers to ensure that their companies (with over £200 million of turnover) are able to maintain an accounting system for the tax returns reporting.
Of the 114 senior financial and tax officers surveyed, more than 12 (11 percent) only expressed confidence that their companies have an established strong compliance system for the SAO legislation while more than 78 (69 percent) of them are said they are likely to file an unqualified certificate.
More than 77 percent are yet to work on tax returns reporting compliance after reviewing their reporting systems, while 46 percent remain bothered by VAT, 32 percent by PAYE, 11 percent by corporation tax, and 8 percent by Excise and Duties.
Although they have already been assured by the HMRC that the SAO legislation will not increase their cost of compliance, half of the senior financial officers insist that tax returns reporting costs have grown considerably. On the other hand, 15 of the surveyed financial officers believed the costs have been covered up by the amount they saved from their review activity.
The only effect that the new regulation’s lack of “objective standard against which SAOs can measure themselves” is uncertainty among businesses that adds up to their costs, said Alan MacPherson, tax partner at Deloitte.
He added that chief financial officers face the greatest challenge at the advent of new tax returns reporting regulations as they are increasingly exposed to “reputational and financial risk as a result of the penalties imposed for non-compliance.”