Tax note: Financial Institution Notices (FIN)

10 March 2022

Tax note: Financial Institution Notices (FIN)

Paragraph 4A of Schedule 36 to the Finance Act (“FA”) 20081 provides HMRC with the power to obtain information and documents from financial institutions via a Financial Institution Notice (“FIN”).  According to HMRC, this power was “expected to have a negligible impact on about 20 financial institutions”,2 such as banks and building societies.  HMRC is expected to inform the Treasury about the number of FINs issued “as soon as reasonably practicable after the end of each financial year”.3  Whether they had a negligible impact or not will be known with certainty following that report.

The main features of this power are:

  1. FINs are documents issued by an authorised officer of HMRC to a financial institution requiring production of certain information specified within the FIN.
  2. Two conditions must be met for HMRC to issue a FIN:
    1. It must not be ”onerous for the institution to provide or produce” the information, and
    2. The ”information or document is reasonably required by the officer” to check the tax position of a taxpayer or to collect a tax debt of the taxpayer.
  3. The FIN must contain the name of the taxpayer to whom it relates and the reasons why the information is required.  The HMRC officer must give a copy of the FIN to the corresponding taxpayer.
  4. Neither the FTT’s approval, nor the taxpayer’s consent, is necessary to issue a FIN.  A financial institution cannot appeal against a FIN.
  5. Paragraph 61ZA of Schedule 36 to the FA 2008 establishes that financial institution means:
    1. Custodial institutions, depository institutions and specified insurance entities, as defined by the OECD’s common reporting standard for automatic exchange of financial account information, or
    2. “A person who issues credit cards”.
  6. Schedule 34 to FA 2021 establishes additional rules for particular circumstances, including penalties for those who breach a requirement imposed under the new paragraph 51A of Schedule 36 to FA 2008.


1Incorporated by s 126 of the Finance Act 2021.
2HMRC, “Amending HMRC’s Civil Information Powers” (3 March 2021).
3 FA 2021 s 126(4)(5).

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Increased Investment in Personal Tax Compliance in the UK (Published in Thought Leaders 4 Private Client)

Advances in technology and increased international fiscal co-operation have made global personal tax compliance initiatives pop up in abundance in recent years. To compound the issue, the Russian invasion of Ukraine and the corresponding economic fallout prompted domestic governments to increase transparency in relation to investments held by wealthy foreign individuals (with a focus on oligarchs).

In the UK, in the context of the cost-of-living crisis, public opinion certainly seems to be in favour of increased accountability for high-net-worth individuals (eg, on 9 October 2022, 63% of Britons surveyed thought that “the rich are not paying enough and their taxes should be increased”).1

HMRC is one of the most sophisticated tax collection authorities in the world and the department is making significant investments in technology in the field of compliance work; they are well placed to take advantage of new international efforts to increase tax compliance, particularly considering the already extensive network of 130 bilateral tax treaties in the UK (the largest in the world).2 The UK was also a founding member of the OECD’s Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) forum.

This article discusses the main developments in support of the increased focus on international transparency and personal tax compliance in the UK. There are other international fiscal initiatives, particularly in the field of corporate taxation, but such initiatives are beyond the scope of this article.

It should be noted that a somewhat piecemeal approach, with constant tinkering makes compliance difficult for the taxpayer and is often criticised for lacking the certainty that a stable tax system needs to thrive.

This article was first published with ThoughtLeaders4 Private Client Magazine

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