.jpg)
February 2012
Putting lawyers in touch with the youth of Oldham
Pearson Hinchliffe partner, Michael Pitt, takes over as 2012 Oldham Law Association President.
MoreGovernment plans unusually strict standard of ‘careless failure’
24th June 2009
"Careless failure" is the seemingly innocuous expression used by the Government as the front of its plans to place a personal liability on companies' senior accounting officers for accurate tax reporting.
The proposal which is neatly enveloped in the latest budget is to apply the grossly strict standard of carelessness against all nominated senior accounting officers (Invariably the Finance Director), in the course of their establishing and monitoring systems for accurate tax reporting.
The legislation will apply only to companies which are “large” by definition under the Companies Act. A company is large if it meets at least two of the following criteria: - Turnover greater than £25.9m, Balance Sheet total more than £12.9m, number of employees greater than 250.
The liability for careless failure is personal to the officer in question and is apparently ultra harsh (bearing in mind the apparent ease by which it may be breached) when considering the greater levels of failure expected (negligence or fraud) in other offences which attract personal liability.
The standards expect the individual charged with the responsibilities of the finances of the company to certify the accuracy of accounts and expect personal financial repercussion in the event that certification is found to be misguided, even if this is a result for instance of an oversight or a failure of internal systems.
Whilst no case has been brought to a conclusion on the point, it appears that the incumbent individual will impose on himself personal liability for any inaccuracy or error, no matter how minor. This may also include the unfortunate circumstance of a tax planning scheme being ruled to be unlawful notwithstanding the mistaken belief of the director at the time of certification that the scheme was legitimate.
The personal liability suffered manifests as a fine, the top level of which could be as much as £5,000.00. Whilst no form of intent or deceit is required to achieve the offence of carelessness, the harsh level of personal liability is not so reflective. It will be a matter of observing how the measure is enforced to obtain guidance on what levels of carelessness and erroneous beliefs or actions attract what level of penalty.
Guidance suggests companies which are covered by the legislation must ensure that:
- Senior accounting officers to establish and monitor adequate accounting systems;
- Such officers to certify the systems are adequate or specify the nature of any inadequacies and confirm they have been notified to the company's auditors;
- Companies to notify to HMRC the identity of the senior accounting officer
It would also be very prudent for directors and officers insurance to be extended to cover accounting officers against the fees incurred in defending any claim made. Unfortunately cover is not available for any penalties or fines levied.
Pearson Hinchliffe Commercial Law can advise you on matters related to personal liability and 'careless failure'. Click here to speak to a specialist commercial lawyer.
January 2012
Company and commercial law reforms to reduce red tape
Companies of all shapes and sizes have been asked for their views on how to tackle unnecessary bureaucracy in company and commercial law.
MoreJanuary 2012
Increase in unfair dismissal qualifying period will apply only to new employees
From 6 April 2012 the qualifying period of service for making a claim increases from one to two years.
MoreJanuary 2012
Maximum compensation for unfair dismissal increases from 1 February 2012
Annual revision of employment tribunal award limits and other amounts payable under employment legislation.
MoreDecember 2011
Health and safety laws to be cut by half
Government plans to slash health and safety red tape will mean substantial savings for small firms, business groups have said.
MoreNovember 2011
Weight Watchers case: the importance to employers of employment status.
The Upper Tier Tribunal holds 1,700 ‘leaders’ at Weight Watchers were employees for tax purposes.
MoreSeptember 2011
How to Conduct a Disciplinary Hearing
A recent presentation by Employment solicitor, Susan Mayall, setting out the stages for handling a disciplinary, referencing the ACAS Code of Conduct.
June 2011
ACAS Advice leaflet “Holidays and Holiday Pay”
Download the guidance covering arrangements for holidays and holiday pay.
October 2010
Recent Case Study: Commercial Landlord and Tenant - An Authorised Guarantee Agreement
Authorised Guarantee Agreements keep the original tenant on the hook in case a third party assignee defaults; they should be drafted with care.
July 2010
Recent Case Study: Doing Battle in the Boardroom
How Pearson Hinchliffe Commercial Law helped members of the Board of Directors achieve the outcome they sought in their boardroom dispute with a senior executive director.
May 2010
How the Mergers & Acquisitions team helped Lanes Group PLC achieve their LAS sell-off
Drainage specialists dispose £12.3 million majority stake in Lanes Assistance Services.
March 2010
PH Employment Direct
The Employment team at Pearson Hinchliffe Commercial Law have created PH Employment Direct - a user-friendly and simple service that gives you access to the best advice at the end of a phone 24hrs a day, 7 days a week, 365 days a year.
February 2010
Oldham Construction Sector
On 3 February 2010 Corporate Commercial partner Roger Hinchliffe delivered a presentation entitled, ‘Joint Ventures’ to the Oldham Construction Sector group.
January 2010
Debt Recovery Service
With our specialist commercial Debt Recovery service you can significantly increase the speed and likelihood of recovering the money owed to your business.