Guidance

Interest returns: Bank, Building Society Interest(BBSI) and Other Interest (OI)

Updated 16 March 2018

1. Background

HMRC (HM Revenue and Customs) uses powers under Schedule 23 to Finance act 2011 to require information about interest earned or credited to accounts of UK residents by Financial Institutions in the UK.

Currently there are two main sorts of return. The Bank, Building Society Interest return that HMRC requires from banks and building societies operating in the normal course of their business. The Other Interest return that HMRC require from financial institutions that are not operating as a bank or building society in the normal course of their business.

Some banks and building societies need to complete both returns, one for their normal banking business and one for other types of business that they do.

2. Names of returns

When introducing the new laws in Schedule 23 to FA 2011 HMRC called the returns Type 17 and Type 18 to keep continuity between the old law and the new. HMRC has now changed these names so that they show what is in the returns rather than just follow an old numbering system. Since February 2014, Type 17 returns are known as Bank, Building Society Interest (BBSI) returns and Type 18 returns are now Other Interest (OI) returns.

3. Guidance notes

These notes give guidance on how to meet your reporting responsibilities for BBSI and OI returns under Schedule 23. There are separate notes for BBSI and OI returns and for 2017 to 2018.

The notes do not affect your right of appeal. They are not a full statement of the law as it applies, or has applied.

3.1 2017 to 2018 guidance notes

BBSI guidance notes 2017 to 2018

OI guidance notes 2017 to 2018

OI Custodian flowcharts

Changes between 2016 to 2017 notes and 2017 to 2018 versions

4. Sending your return

You must submit your return by one of the methods detailed in your notice to make a return. The Secure Electronic Transfer (SET) service is being replaced by the Secure Data Exchange Service (SDES). If you don’t already use SET then you must follow the new SDES guidance. If you already use SET, HMRC will contact you with details about how and when you can migrate over to SDES.

If you are not using SET or SDES please ensure all returns are clearly labelled and well packaged. HMRC recommends that returns are sent as securely as possible by means that record delivery or that can be tracked in the case of delivery failure. HMRC can’t accept returns on floppy disks.

5. Returns Bulletins

Bulletins are issued as and when needed, not at specific times of the year, and include changes to general advice on making returns, changes to the returns process, and security for a range of returns. We only publish the latest bulletin here but changes detailed in earlier bulletins can be found in the returns problem solver.

Read the Financial Institutions Returns Bulletin - number 9.

Use the Return Problem solver to resolve issues.

6. Electronic Flat Text File (formerly Magnetic media) specifications

The Electronic Flat Text File specifications below set out the formats for reporting and give guidance on making your returns.

Read the BBSI Electronic Flat Text File (EFTF) Specification

Read the OI Electronic Flat Text File (EFTF) Specification

The specifications and formats described in these documents must be used in these forms of return sent to HMRC. Any return that does not conform to these specifications may be rejected and you may be regarded as either having failed to make a return or as having made an incorrect return.

There are monetary penalties for making a late or incorrect return or not making one at all.

When submitting your live return on physical media please ensure that you complete a submission document and send it with your return. HMRC usually issue pre-completed submission documents two weeks after they issue the notice to make your return. They are also available on request by contacting HMRC or you can download one.

Return Submission Document.

7. Spreadsheets for BBSI and OI returns

As an alternative to using the BBSI or OI EFTF specifications you can submit your return on a spreadsheet instead of paper. You should use one of the HMRC spreadsheet templates.

The most common cause of spreadsheet failure has been the inclusion of excessive characters (including spaces). We have therefore updated the spreadsheet to include conditional formatting that will detect if more than the permitted number of characters has been entered in a cell.

If you enter more than the permitted number of characters the cell on row 1 will turn red and will stay red until all the excess characters have been removed. Spreadsheets with a red cell on row 1 will not process and you’ll be required to correct the error(s) and resubmit your return. The formatting check details, on row 1, the total number of remaining errors and position of the first error. As you correct the errors this information should update. The formatting will not check the accuracy or suitability of the data and the return could still fail due to other reasons.

The spreadsheets are Excel version 2003 (.xls), capable of accepting 65,536 rows. They’ll not convert to the later version of Excel (.xlsx), capable of holding in excess of a million rows.

If you require a later version of the spreadsheet please e-mail tpi.c@hmrc.gsi.gov.uk detailing which spreadsheet you require.

There are guidance notes on how to complete a spreadsheet.

Use spreadsheet BBSI refs A or B if your institution reference begins with A or B.

Use spreadsheet OI refs L or S if your institution reference begins with L or S.

The finished spreadsheet can be sent via SET or SDES.

8. Forms (paper returns)

HMRC no longer accepts paper forms. All institutions making paper returns were contacted and have been transferred to the other methods.

9. Other information needed to make reports

If you’re reporting interest paid and returned in a currency other than sterling you must also report the ISO standard currency code for that foreign currency.

10. Fully Reportable (FR) countries

BBSI and OI reports are now restricted to investors with addresses in the UK.

There were a number of changes between 2015 and 2017 concerning the FR countries. There are no countries left on the list of FR countries so the list has been withdrawn.

11. Further information

To request paper forms, please telephone the forms orderline.

To enquire if a return has been received or find out whether it has passed or failed email: tpi.c@hmrc.gsi.gov.uk

Make sure you quote your company name, reference (including sub number), year of return showing when and how you sent the return.

For advice on how to submit returns or how to complete forms email: cni.enquiries@hmrc.gsi.gov.uk

Don’t send returns to these email addresses.

11.1 Where to send your returns

Electronic returns can be submitted using:

• SET
• SDES
• email, to the email address that is shown in your notice
• physical media (CD/DVD), to the postal address that is shown in your notice