Tax administration — regulations to update the UK’s automatic exchange of information agreements
Published 25 June 2025
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Who is likely to be affected
Financial institutions carrying on business in the UK. ‘Financial institution’ is a defined term and can include companies, trusts, or partnerships, but not individuals. Also, holders of financial accounts.
General description of the measure
The government is introducing regulations to bring in updated rules for the Organisation for Economic Co-operation and Development’s Common Reporting Standard (CRS), and improve the effectiveness of the UK’s implementation of the CRS and United States of America Foreign Account Tax Compliance Act (FATCA).
The FATCA and CRS rules require financial institutions to:
- identify accounts maintained for specified persons (account holders and controlling persons who are tax resident in jurisdictions with which the UK has entered into an agreement to exchange information) about a wide range of financial accounts and investments to help tackle tax evasion
- collect and report information in a specified manner on specified persons to HM Revenue and Customs (HMRC)
The regulations introduce new rules that expand the scope of the CRS to include electronic money institutions and certain e-money products, exclude most charities, and require reporting of additional information to improve usability of the data. The regulations also introduce a new mandatory registration requirement for financial institutions and reform the penalty provisions.
Policy objective
The updates to the CRS and improvements to the UK’s implementation will increase the effectiveness of HMRC’s compliance activity as well as increasing the deterrent effect for those who attempt to evade UK tax by holding financial assets outside of the UK.
Background to the measure
The UK has international obligations to exchange information on financial accounts with the United States of America under FATCA and with other countries under the CRS.
As announced in November 2023, the government committed to implementing the updated CRS rules in time for reporting in 2027. A public consultation was launched at Spring Budget 2024 and a summary of responses was published alongside draft regulations at Autumn Budget 2024.
Detailed proposal
Operative date
The regulations will have effect on and after:
- 1 January 2026 in relation to the updates to the CRS
- 21 days from the date these regulations are laid in relation to mandatory registration and penalties
Current law
Current law to implement the FATCA agreement and the 2014 version of the CRS is contained in The International Tax Compliance Regulations 2015 (Statutory Instrument 2015/878) as amended.
Proposed revisions
These regulations implement the amendments to the CRS, including new definitions of relevant terms and new obligations placed on reporting financial institutions in relation to due diligence and reporting. The regulations also require registration of reporting financial institutions and trustee-documented trusts and put an obligation on account holders and controlling persons to provide valid self-certifications. They reform the penalty framework, including introducing an enhanced penalty on financial institutions for failing to obtain valid self-certifications where required.
Summary of impacts
Exchequer impact (£million)
| 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 |
|---|---|---|---|---|---|
| nil | nil | nil | negligible | negligible | negligible |
This measure is expected to have a negligible impact on the Exchequer.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure is not expected to impact upon tax compliant individuals, households, or family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be impacts for those in groups sharing protected characteristics.
Impact on business including civil society organisations
Estimated one-off impact on administrative burden
| One-off impact | £ million |
|---|---|
| Costs | 107 |
| Savings | nil |
Estimated continuing impact on administrative burden
| Continuing annual impact | £ million |
|---|---|
| Costs | 0.3 |
| Savings | negligible |
| Net impact on annual administrative burden | +0.3 |
This measure is expected to have a significant impact on UK reporting financial institutions and trustee-documented trusts, which will be required to register with HMRC. Of these, approximately 6,000, including approximately 300 that are newly brought within scope of the rules, will have additional due diligence to carry out and more information to report. One-off costs for businesses could include familiarisation with the changes, new IT infrastructure, purchasing or updating software and training staff in new due diligence processes. Continuing costs could include recording more information on customers and providing HMRC with this information.
Genuine non-profit organisations will be taken out of scope and therefore have reduced costs as a result of this measure.
This measure is expected to have negligible impact on business experience of dealing with HMRC as the change has a minor effect on obligations already required by HMRC.
Operational impact (£million) (HMRC or other)
HM Revenue and Customs will have to make changes to IT systems to support this change, at an estimated cost of £24.9m between 2025 to 2026 and 2031 to 2032. There will also be a need for extra staff to support implementation, at an estimated cost of £2.8m.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be kept under review through regular communication with affected stakeholders.
Further advice
If you have any questions about this change, contact David Smith, Exchange of Information Policy on Telephone: 03000 577521 or email: eoi.policy@hmrc.gov.uk.
Declaration
James Murray MP, Exchequer Secretary to the Treasury, has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.