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HMRC internal manual

International Exchange of Information Manual

HM Revenue & Customs
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Compliance: Introduction

Compliance: Introduction

Under all the regimes, Financial Institutions will be required to have procedures and systems in place to ensure that Reportable Accounts are identified, the relevant information is collected and the information is then reported to HMRC for exchange with those jurisdictions that the UK has agreed to send information to.

Where a Reporting UK Financial Institution has taken all reasonable efforts to supply accurate information and to establish appropriate governance and due diligence processes then they will be held to be compliant with the UK Regulations. This will be the case despite the occurrence of minor and administrative errors, or a failure to supply accurate information despite reasonable care having been taken [see IEIM405020].  It is the view of HMRC that if the Financial Institution has made all good faith efforts then this will also constitute all reasonable efforts for the purposes of establishing compliance with the UK Regulations.

However, Financial Institutions need to be aware that under the US and CDOT IGAs, the CRS and the DAC a failure to rectify minor and administrative errors, or correct inaccurate information, when these are discovered may lead to the Financial Institution being regarded as having failed in its obligations. This is referred to under the IGA with the USA as Significant Non-Compliance and may lead to a declaration that the Financial Institution be treated as a Non-Participating Financial Institution for FATCA purposes. Penalties may also be imposed under Regulations that apply across all the regimes.