Corporate report

Report on HM Revenue and Customs Financial Institution Notice powers (2024 to 2025)

Updated 15 January 2026

Presented to the House of Commons pursuant to section 126(6) of the Finance Act 2021.

Summary

This is the fourth report on the use of Financial Institution Notices (FINs). The period covered is 1 April 2024 to 31 March 2025.

The report shows that FINs continue to have a positive effect on the time taken to respond to international information requests, with a further reduction in the average response time compared to last year. Despite the fall in the number of FINs issued for international requests, the FIN continues to achieve its policy objectives, demonstrating the UK’s efforts in meeting international standards to support its reputation as a leader in tax transparency.

There has also been an increase in the use of domestic FINs and this report outlines the reasons to account for this, including a lack of response or non-co-operation with taxpayer notices, as well as any reported impacts on taxpayers and financial institutions.

Detailed findings

The table below sets out the use of FINs in the period 1 April 2024 to 31 March 2025. Figures from the previous reporting year have been included for comparison.

	1 April 2023 to 31 March 2024	1 April 2024 to 31 March 2025
Total number of FINs issued	1143	1307
Total number of domestic FINs issued	918 (80.3%)	1134 (86.8%)
Total number of FINs issued for international requests (irrespective of when the request was received)[footnote 1]	225 (19.7%)	173 (13.2%)
Total number of FINs issued for debt collection (applies to domestic FINs only and included in above total)	10 (0.9%)	4 (0.3%)
Number of applications for FINs formally rejected by authorised officers [footnote 2]	114 (10.0%)	208 (15.9%)
The average time taken to respond to international requests received in year [footnote 3]	127 days	116 days

The data demonstrates there has been a further improvement in the average time taken to process international exchange of information requests. In the current reporting period, the average time taken to process international requests was 116 days, compared to 127 days for the previous year. This is significantly lower than the 180 days international standard, demonstrating the UK’s continued efforts to comply with international minimum standards for tax transparency and information exchange.

The total number of FINs issued continued to rise, with domestic FINs accounting for 86.8% of the overall total. This represents an increase in both absolute and percentage terms for domestic FINs. The number of FINs issued in response to international requests for exchange of information saw a reduction compared to the previous year, with 173 FINs issued accounting for 13.2% of the overall total.

The continued rise in the use of domestic FINs can be attributed to the following:

• in the majority of cases, HMRC has had to rely on a FIN because there was a lack of response or non-co-operation to a taxpayer notice
• in some cases, taxpayers are willing to comply with HMRC’s request but do not, or no longer, have access to the information or documents
• multiple FINs being issued in a single case where the taxpayer holds several accounts with different financial institutions
• an increase in compliance officers and greater awareness of the FIN’s role in supporting tax enquiries

FINs are only issued when it is necessary and appropriate to do so, operating within the strict control of several safeguards as outlined below. Whilst the number of FINs issued has increased to 1307, this contrasts with the 316,000 ^{[footnote 4]} compliance checks that were conducted by HMRC during the same period, representing a very small fraction of HMRC’s overall compliance activity.

Impacts

Taxpayers

There has been one judicial review application raised against the use of a FIN, but this was subsequently refused by the High Court.

Financial institutions

No issues or concerns have been raised by financial institutions regarding the number of FINs or that the information and documents requested in the FINs were considered unduly onerous. No formal complaints have been received from financial institutions against FINs issued.

Amendments to the Common Reporting Standard (CRS)

The FIN can only be issued to a financial institution as defined under the CRS or a person who issues credit cards not covered under CRS. However, it does exclude where a financial institution is only such an institution because and only because it is an investment entity within section VIII (A)(6)(b) of the CRS.

Following the first comprehensive review of the CRS by the OECD, some amendments have been made to the definition of a financial institution to respond to technological and financial innovations. New digital financial products will be included in the scope of CRS, including specified electronic money products and central bank digital currencies. These changes took effect from 1 January 2026.

These changes are likely to impact HMRC’s FIN usage and from next year’s report this will cover FINs issued to a wider range of financial institutions.

Background

The FIN is a type of third party information notice under Schedule 36 of Finance Act 2008. FINs allow HMRC to request information and documents from certain financial institutions for the purposes of checking a taxpayer’s tax position, or for collecting a tax debt. Unlike its counterpart third party information notice, a FIN does not require either taxpayer consent or tribunal approval.

Following consultation, the FIN was introduced by the Finance Act 2021, driven by the UK receiving a recommendation under a review by the Organisation for Economic Co-operation and Development (OECD) to reform HMRC’s information gathering powers and processes to support effective overseas information exchange. The international minimum standard for exchange of information for tax purposes requires tax authorities to respond within 180 days (6 months). In 2018, the UK’s average response time was 12 months largely attributed to the requirement for taxpayer consent or tribunal approval when issuing a third party information notice. The FIN can also be used to support domestic tax compliance.

As the FIN does not require taxpayer consent or tribunal approval, several safeguards were built into the legislation including:

• information or documents sought must be reasonably required for the purpose of checking a known taxpayer’s tax position or for collecting a tax debt
• an authorised and trained officer must approve each FIN
• it would not be onerous for the financial institution to comply with the request, in the opinion of the authorised officer
• the taxpayer must be told why the information is needed when the FIN is issued, however, this requirement can be disapplied with the agreement of the independent tax tribunal, where that tribunal is satisfied that informing the taxpayer could undermine the collection or assessment of tax
• if a financial institution does not comply with a FIN, penalties can be charged, with financial institutions given the right to appeal against any penalties levied

There is also a legislative requirement to provide an annual report to the House of Commons on the use of FINs.

1. These figures refer to all FINs issued in the year irrespective of when the request was received, rather than both received and issued in the same year. ↩

2. This figure includes applications that may have been rejected, then resubmitted and approved. HMRC requires compliance officers and authorised officers to ensure FIN applications are completed to the same standard as tribunal approved notices. The percentage comparison is based on the proportion of applications rejected to the number of FINs issued in the year. ↩

3. The processing figure is calculated by measuring the number of days between the date the request was received from the overseas tax authority in that year and the date HMRC received the information from the UK financial institution to create an average processing time for the year. This is based on in year figures. For 24/25 there were 102 requests received in year and resulted in a FIN being issued in year with processing time of 116 days. ↩

4. HMRC annual report and accounts: 2024 to 2025 ↩