On 3 August 2017, the First-tier Tribunal13 held that HMRC was not justified in making penalty assessments against the finance director of a group of companies for a failure to comply with the senior accounting officer rules in Schedule 46 to the Finance Act 2009 (the SAO rules).
HMRC had argued that the nominated SAO had failed in his "main duty" to take reasonable steps to ensure that appropriate tax accounting arrangements are established and maintained.
The Tribunal noted that whilst the statutory penalties under the SAO rules were relatively modest, the potential impact on an individual's reputation and employment prospects could be more significant. Examining the facts given that this is an objective question, the Tribunal held that HMRC had failed to discharge the burden of proof that the SAO had not taken the required reasonable steps. In fact, the Tribunal held, the "overall impression" was one of gradual improvement and the individual had repeatedly asked for additional resources in order that he may properly carry out his duties.
The decision can be viewed here.