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Some banks and other financial institutions use inappropriate criteria to decide in which format they report payments of interest, HMRC have warned.
The department’s announcement follows an initial check of data supplied to fellow European Union states under the EU savings directive.
Financial institutions’ declarations regarding payments of interest can be made either under FA 2011 schedule 23 – by type 17 and type 18 returns – or the UK regulations that implement the savings directive.
Some banks and other financial institutions use inappropriate criteria to decide in which format they report payments of interest, HMRC have warned.
The department’s announcement follows an initial check of data supplied to fellow European Union states under the EU savings directive.
Financial institutions’ declarations regarding payments of interest can be made either under FA 2011 schedule 23 – by type 17 and type 18 returns – or the UK regulations that implement the savings directive.
Problem arise in areas including country of residence – which when determined as that stated in the passport of an individual rather than place of his or her current permanent home can lead to interest paid to a person with a UK address being erroneously reported to the fiscal authorities of other EU member states.
The information of an individual with UK address should normally be reported within the type 17 and 18 system. If he or she is reported via the savings directive system, HMRC may not receive the tax information they need.
The Revenue has asked all financial institutions to check that their procedures result in correct returns.
