Notifying your customers that HMRC’s noose is tightening


On 9 September, HMRC laid The International Tax Compliance (Client Notification) Regulations SI 2016/899 (“the Notification Regulations”) which oblige UK FIs to notify their customers that HMRC will be exchanging financial account information with other Revenue authorities under the US Foreign Account Tax Compliance Act (“FATCA”), the UK Agreements with the Crown Dependencies and Overseas Territories (“CDOT”) and the Common Reporting Standard (“CRS”) (collectively “AEOI”).


The notifications must be sent to the relevant customers on or before 31 August 2017.




HMRC will be receiving information on financial accounts held by Financial Institutions (“FI”) in each of the Crown Dependencies and British Overseas Territories by 30 September 2016. This will be followed 12 months later by the first wave of jurisdictions under CRS which will eventually cover over 100 jurisdictions.


In advance of receiving the information under the AEOI agreements, HMRC have been giving taxpayers opportunities to come forward and voluntarily declare any outstanding tax liabilities. FIs are now being required to notify their customers of the unprecedented volume of information that HMRC will be receiving


What do HMRC expect?


HMRC are expecting all UK FIs who are obliged to make returns under FATCA or CRS to identify “relevant customers” who, broadly:

  • have been provided with “offshore advice or services”;

  • have been referred to a “connected person” outside the UK for the provision of the above; or

  • the value of the account was greater than US$1m on 30 September 2016.

A “relevant customer” is broadly one who the FI “reasonably believes” to have been resident in the UK for income tax purposes during the 2015-16 and 2016-17 tax years. However, there are a number of specific exemptions and caveats that FIs need to be aware of.

HMRC have specified the data content that the notification must contain. However, FIs will undoubtedly wish to add their own context to help reassure customers who have been diligently meeting their obligations.


What should FIs do now? FIs will need to plan:


  • the logistics of the exercise (timing of data extraction, posting, etc.);

  • the design of the system interrogation for the exercise;

  • the accuracy of the source data and how any conflicts that are identified will be resolved;

  • whether any cleansing of data will be required;

  • how will “relevant persons” be identified;

  • their additional wording of the wider notification;

  • how they will issue the notifications, bearing in mind the treatment of “goneaways”, communal addresses and “hold-mail” addresses;

  • how they will deal with any resulting queries raised by customers, bearing in mind the requirement not to give tax advice and other regulatory obligations (e.g. suspicious activity reports) that may be triggered where customers indicate that they may have been committing tax evasion

  • whether the exercise will be insourced or outsourced.


We would be pleased to have a complimentary discussion with you to discuss the potential impact of the Notification Regulations with you in more detail. To arrange a discussion or further information, please contact a member of our team.

Contact us

Ali Kazimi

Managing Director

Tel: +44 (0) 203 865 0626

Mohsin Talati

Senior Manager Tel: +44 (0) 203 865 0625

This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Hansuke Consulting Limited would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Hansuke Consulting Limited accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

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