The UK has taken the most decisive steps in enforcing corporate tax compliance through personally binding legal instruments. Unlike the Netherlands, which prioritizes voluntary agreements, or Australia, which uses a compliance rating system, the UK has since 2009 required every large corporation to appoint a Senior Accounting Officer (SAO). This senior official is personally and fully responsible for the accuracy and adequacy of the company's tax governance.
This strict policy was born out of public pressure and the global financial crisis in the late 2000s. At the time, rampant corporate tax avoidance practices triggered public outrage. Her Majesty's Revenue and Customs (HMRC) responded to the situation by shifting the focus of tax compliance from mere collective corporate responsibility to a legal obligation directly attached to the individual names of directors.
Under this regulation, an SAO—typically the Finance Director or CFO—must sign an annual certificate stating that the company's tax accounting systems are adequate. In the event of negligence, fines are not only imposed on the company but also target the director personally. The stain on professional reputation resulting from a record of negligence serves as a highly effective disincentive for company executives.
In addition to the personal liability of the SAO, the UK strengthens supervision through multi-layered schemes. Large companies are required to publish their tax strategies transparently on the internet. HMRC also implements a risk rating system called Business Risk Review+ (BRR+) to determine audit intensity, as well as enforcing strict rules requiring the reporting of materially uncertain tax positions.
For the business landscape in Indonesia, the governance model implemented in the UK serves as a relevant comparative study. This system demonstrates how the concept of directors' liability, which is already recognized in domestic corporate law, can be further developed to drive higher tax accountability directly at the boardroom level.
