U.S. companies with large operations in the United Kingdom have a new layer of compliance complexity to deal with. With the enactment yesterday of the Finance Bill, the nation’s annual omnibus legislation for changes in the tax law, senior accounting officers of large U.K. corporate taxpayers are now required to certify that their accounting systems are adequate for the purposes of accurate tax reporting. And they face personal liability for any “careless or deliberate” failure.

Shades of Sarbanes-Oxley? For sure.

The similarity to the U.S. law hasn’t been lost on commentators across the pond. Finance blogger Kofi Adusei Koduah-Sarpong, for example, bemoans the failure of British lawmakers to learn from the experience of their “Atlantic cousins,” given “all the havoc SOX created when it was passed into law.”

If anything, the penalties imposed by the new law are even more pointed than Sarbanes-Oxley’s. “The intentions behind the new sections of the 2009 Finance Bill are very similar to SOX, but the related penalties are different in that they are levied against the executive who signs off on the company’s tax process rather than on the company itself,” notes Chris Walsh, chief international indirect tax officer with tax software firm Vertex Inc., in this news brief. “We expect that these types of provisions will proliferate within Europe in the coming years, and increasingly harsh penalties will apply over time.”

Not surprisingly, senior finance and tax pros in the United Kingdom are far from thrilled with the legislation. In a Deloitte poll conducted in May, half of respondents said they were not comfortable with being immediately compliant with the new rules. The projected costs of compliance are not crushing, but they’re not trifling either. Eighty-seven percent of participants from FTSE 100 companies expect to spend between GBP50,000 and GBP250,000 (US$82,000 to $410,000). Eighty-five percent of respondents from FTSE 250 companies put the figure at GBP50,000 to GBP100,000 ($82,000 to $164,000).###