Information on submitting a return under The Foreign Account Tax Compliance Act (FATCA) on behalf of a financial institution.
Financial institutions must review the accounts that they maintain and report certain account holders to HM Revenue and Customs (HMRC) every year. This includes information that must be sent to the US under The Foreign Account Tax Compliance Act (FATCA).
This guide explains what to do if you’re going to submit a FATCA Return on behalf of a financial institution, when to submit it, and links to more detailed guidance.
Register with HMRC
You will need to register with the US tax authorities, the Internal Revenue Service (IRS), and obtain a Global Intermediary Identification Number. If you’re going to submit a FATCA Return for yourself or on behalf of a financial institution you’ll need to register with HMRC using their online services. This service is available through the Government Gateway. To access the FATCA service you’ll need an ‘Organisation’ type Government Gateway account. You can register from mid-October 2014.
As part of this process you’ll be enrolled for the FATCA online service. You’ll then get a FATCA ID for yourself, and an HMRC registration identification number for each financial institution you’ve registered.
If you have any problems registering for the service contact the HMRC Online Services Helpdesk
Submit a FATCA Return
The deadline for submitting a return is 31 May following the end of the reporting year.
Please note – it is not necessary to make a ‘nil return’ if you have nothing to report.
However, you should check annually to ensure that there is nothing to report in that reporting year.
Late and inaccuracy penalties may apply where a valid return has not been submitted on time when there was an obligation to do so.
Reasonable excuse for failing to file on time: You will not be liable to a penalty if you have a reasonable excuse for failing to file by the 31 May deadline and you remedy that failure without unreasonable delay after the excuse ends.
A financial institution (FI) is the entity that has the reporting obligation under the regulations. A financial institution may have multiple account holders to report on. Equally, you may wish to report on behalf of a number of financial institutions.
There are various types of financial institution that all report through the same system. In some contexts, the term ‘account holder’ may not seem intuitive. It is used to denote the US person who the financial institution has an obligation to report upon. For trusts, the ‘account holder’ will be a US person with an ‘Equity Interest’ as defined at Article 1.1.(v) of the UK/US Intergovernmental Agreement. In most instances, this means the settlor and beneficiaries but may include any other natural person exercising ultimate effective control of the trust.
Reporting for multiple financial institutions
It is possible to file a return on behalf of multiple financial institutions through the same Government Gateway account. Within that account you will need to separately register each financial institution that needs to make a report. This is the case even for financial institutions that are sponsored entities sharing the same Global Intermediary Identification Number (GIIN) as the sponsor. In this case, you should add the financial institution separately, but use the sponsor’s GIIN. This is necessary so that the IRS can identify accounts within US taxpayer’s returns and relate them to the accounts returned by the reporting financial institution without having to query either of the returns.
Log on to your account through the HMRC Government Gateway. You can then access the FATCA services through the ‘Services you can use’ link.
You have 2 choices to file your return:
- via a FATCA online return, or
- the HMRC XML schema for high volume or complex returns
This is done entirely within the Government Gateway. There are a series of screens to progress through which constitute the report. At each stage of the process information that you have entered will be played back to you to confirm you are happy with it. Before your return is submitted you will be asked to re-enter your Government Gateway login details. Until this point it is possible to amend or delete a return.
Data will be saved at each stage when you click the ‘Next’ button, so you can log out and return to complete your return at a later date but it must be completed before the 31 May deadline.
XML Schema Returns
You will need to use the FATCA schema where:
- the account holder is a Non-Financial Foreign Entity (NFFE) with more than 30 reportable controlling persons (for example, for some complex trusts/partnerships)
- the account holder, or any controlling person of an NFFE, has multiple reportable tax residencies
If you’re using the schema you will need to make sure that the file is valid before uploading it using the FATCA online service (if you’re an existing user of Secure Electronic Transfer - you can continue to use this service). You can submit this data on a single return, or through multiple returns. If you’re also submitting data for other financial institutions you may include them within a single submission to HMRC.
Once created, the schema can be uploaded via the ‘At a glance’ screen on your homepage. If you upload a later version for the same reporting year, this will replace the earlier schema.
Once you’ve submitted your returns you will receive an acknowledgement from HMRC and they will inform you whether your return is in the valid schema format.
Correcting a return
You must submit any corrections to HMRC as soon as you identify them. You can make the corrections manually using the FATCA online service, or if you use a schema it will allow you to make a submission that identifies corrections to previously submitted returns.