Banks must comply with the ‘spirit’ of tax laws

Download document:

Banks must comply with the ‘spirit’ of tax laws - .PDF file.

By Elisabeth Gaunt

In December 2009, the UK tax authorities (HMRC) issued the Code of Practice on Taxation for Banks. According to figures published by HMRC in March 2012, 225 banks in the UK (including the top 15) have so far ‘voluntarily’ adopted the code. The code also applies to organisations undertaking banking-type activities in the UK (for example insurance groups, motor manufacturers and retailers, to the extent of their banking activities). References to ‘bank’ in the note below should be read accordingly.

A bank that does not adopt the code or adopts it, but does not implement the code properly, will not be considered low risk by HMRC. HMRC may allocate additional resources to such a bank and subject such a bank to additional scrutiny.

If after discussion with HMRC, HMRC takes the view that the bank is still not compliant with the code, HMRC may communicate this to the bank and explain what the bank should do to comply. Once a bank has been told that it is not compliant, HMRC would expect the bank to acknowledge this in a public pronouncement…

If you are registered and logged in to the site, click on the link below to read the rest of the Taylor Wessing briefing. If not, please register or sign in with your details below.