Revenue and Customs Brief 16 (2014): reporting of interest payments
Published 22 April 2014
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Who needs to read this?
Financial institutions that make returns to HM Revenue and Customs (HMRC) about payments of interest under the UK regulations implementing the European Union Savings Directive (EUSD).
What action should be taken
Check that your procedures are correctly separating interest payments you make to customers with addresses in the UK, and fully reportable countries, from those with addresses in the EU, and other prescribed territories.
Issue
HMRC issued an earlier brief on this subject last November as Revenue and Customs Brief 34/13. At that time we had only completed an initial investigation of the problem. We have now completed a more detailed investigation. This has shown that some financial institutions making returns of interest payments are not separating their customers by address onto the correct return.
Future
All paying agents must take reasonable care when making EUSD returns to HMRC to ensure those returns are accurate. The regulations provide for penalties for financial institutions that send us inaccurate returns. These penalties apply equally to deliberately incorrect returns or because the institution has not taken enough care to make sure the return is correct.
The provisions have now been in place for a number of years and the expectation of HMRC is that all institutions should by now have in place appropriate systems to ensure that:
- complete and accurate returns are made
- returns are checked for credibility before they are submitted
This includes ensuring that all appropriate data is entered in each relevant field. If an institution is found to be continuing to submit returns that include incorrect information or are otherwise incomplete or inaccurate then they can expect that the penalty regime will be invoked. We do not want to use these penalties, we would much rather receive correct returns.
Institutions should consider themselves on notice that HMRC will be looking more critically at EUSD returns in future.
Further information on this subject can be obtained from the internet by following the link below.
Type 17 and 18 (Bank, Building Society Interest and Other Interest) returns of interest and EUSD
Or by phone from Nick Wright on Telephone: 03000 576 380.
Issued 22 April 2014