HMRC publish new client notification letter

Finance (No. 2) Act 2015, s. 50 introduced new client notification obligations. Details of the obligations are set out in  the International Tax Compliance (Client Notification)Regulations 2016 SI No 899.

Purpose of the new Regulations

The Regulations amend the International Tax Compliance Regulations 2015 (S.I. 2015/878) to force financial institutions and other advisers to notify their clients about information that HMRC will receive under international agreements.  The Regulations apply to financial institutions and to individuals and companies who, as part of their business, provide advice or services to individuals relating to offshore accounts, income or assets.

Financial institutions are required to identify individuals to whom notifications in the form prescribed by the regulations must be sent on or before 31st August 2017. The individuals concerned are those reasonably believed by the financial institution to be:

  • Resident in the UK for income tax purposes for the tax years 2015-16 or 2016-17;
  • Holding a ‘high value’ account with the institution on 30th September 2016 (exceeding $1m) or where, in the relevant period, the individual held certain offshore accounts with the institution (or were referred by it to another financial institution for such an account to be provided).

Other advisers are required to use either the “general approach” or the “specific approach” to identify individuals to whom the prescribed notifications described must be sent. The general approach identifies individuals who were provided with any advice or services relating to their personal tax affairs by the adviser in the relevant period. The specific approach identifies individuals who, in that period, were provided with offshore advice or services relating to such tax matters or were referred by the adviser to a connected person outside the United Kingdom for the provision of such advice or services. Both approaches exclude individuals the adviser reasonably believes were not (or will not be) resident in the United Kingdom for the tax years 2015-16 and 2016-17 or for whom, on 30th September 2016, the adviser has no reasonable expectation of advising further or providing more services.

You have been warned

HMRC’s letter, which will be sent under cover of a letter from the Financial Institution, reads as follows:-

Things are changing – the tax world is becoming more transparent

  • HM Revenue and Customs (HMRC) is getting tougher on those not paying the right amount of tax across their offshore tax affairs. 
  • From 2016, HMRC is getting new financial information about our customers from more than 100 jurisdictions – including details about overseas accounts, structures, trusts, and investments.
  • HMRC is already using information, supplied by overseas banks, insurers, and wealth and assets managers, to identify the minority who are not paying what they owe.
  • Are you confident that your UK tax affairs are up-to-date?

You need to regularly check that you have declared all of your UK tax liabilities and, if needed, bring your tax affairs up-to-date. This is your responsibility.

 Personal circumstances change. For example, you may have recently inherited assets overseas. Tax laws change too. All of this means that previous advice can be out-of-date, with costly consequences.

 If you are confident that your tax affairs are up-to-date and complete, then you don’t need to do anything further.

  • If you are unsure, we recommend that you speak to a tax adviser to find out if you need to take action now.
  • If you find that you need to bring your tax affairs up-to-date, it can be easier than you think. You can choose to do this now using HMRC’s straightforward online disclosure facility at disclosure-facility-make-a-disclosure
  • If you have not paid the right amount of tax and choose not to take action now, you need to know that:
  • HMRC will find out about your money and assets overseas through new information from more than 100 jurisdictions.
  • Penalties are increasing for those who are not paying the right amount of tax on their offshore assets, and you can even face criminal prosecution. Under new rules, you could face further penalties based on the value of the asset as well as the tax due, resulting in potentially life-changing consequences.

 If you choose to delay in coming forward, it’s very likely to cost you more and there is also more chance that HMRC will come for you.’

Come to us before we come for you.


  • If you are confident that your tax affairs are up-to-date, and you have declared all of your UK tax liabilities, then you don’t need to do anything further. 

We are already using early financial information to identify the minority who are not paying what they owe. If you need to bring your tax affairs up-to-date, it is your responsibility to do so – act now at’

Levy and Levy comment

Taxpayers would be well advised to heed the warning in HMRC’s letter; there is no doubt that the political will to ‘crack down’ on owners of undeclared offshore accounts has never been stronger.  For those who choose to remain undisclosed, criminal prosecutions are likely to follow.



Levy and Levy – the tax investigation and resolution specialists