Is your bank annoying you?

[Oldgaloot]

My bank - Halifax - tell me that US legislation requires it to find out from me whether I'm a UK citizen, or perhaps a citizen of the US, or otherwise liable to US tax. It's written to me twice sending a form to be completed. Unfortunately there's nothing I can enter into the form that they don't already know. But Halifax want it completed anyway and imply they'll tell HMRC if I don't.

There's nothing they can tell HMRC that will come as a surprise to them but I just don't like the whole thing.

Am I just unlucky or are there others affected by our mad world?

 

[nlogax]

Am I just unlucky or are there others affected by our mad world?

Welcome to the slimy tentacles of US federal law reaching their way to you via FATCA. Very common for UK banking customers to have to complete these forms. I last had to sign a form a couple of years back.

https://www.lawscot.org.uk/members/...ion/foreign-account-tax-compliance-act-fatca/

The Foreign Account Tax Compliance Act (FATCA) is part of a larger piece of legislation introduced in the United States in 2010 to ensure that that country’s citizens are fully disclosing their worldwide income to the Internal Revenue Service (IRS). The key point is that as a result of the UK-US intergovernmental agreement (IGA), the legislation is now part of UK law through s222 Finance Act 2013 and the regulations issued under that section. There are consequences for default – both financial and reputational.

FATCA has been introduced to put a reporting burden on the payer of monies as another way of protecting the US tax base. All UK entities are subject to the UK rules and solicitors may be asked for their clients’ FATCA status with the usual AML and client identification processes when dealing with other institutions, such as banks and stockbrokers.

 

[87 027]

I haven't had this on a personal account but have experienced it on a charity account for an organisation of which I am treasurer. They wanted the UK tax details of officials and trustees.

I suspect it is connected to the US FATCA (Foreign Account Tax Compliance Act) regulations which create (extra territorial) obligations on non-US financial institutions to confirm details of any US citizens, since they are liable to US tax on worldwide income.

Separately I have been subject to a number of 'know your customer' revalidations and one of my neighbours, who used to be a Director of one of the large UK banks, told me that internal procedures dictate that they cannot rely on and must revalidate any details that are more than 5 years old.

For the sake of a quiet life I would simply provide the information being requested and then it is all done and dusted.

 

[MotCO]

Do you have any connection with the US? Or do all banks around the world have to ask similar questions to all their account holders?

 

[JamesT]

Not a bank account and not the US, but I did have Aviva repeatedly ask me to confirm that I am and always have been resident in the UK for a life insurance policy I was down as the trustee of. Apparently HMRC kept asking them and there’s no way of saying I already told you that last year.

 

[nlogax]

Do you have any connection with the US? Or do all banks around the world have to ask similar questions to all their account holders?

Banks from about 100 countries are required to do this and report customer data via their respective tax authorities. Banks from another handful of countries are required to send customer data directly to the IRS.

 

[styles]

Never had this from any bank account - personal, business, or charity.

My banks have mildly irritated me on a few occasions but no more than any other company I suppose.

The worst was probably Lloyds Bank when setting up an account for a charity and they really couldn't cope with the idea of the cardholders living in different parts of the UK, and the charity not being a registered charity with a registered address; so everybody's bank card and comms were sent to my house and I had to redistribute. Mind you, no worse than the ordeal of opening the account to begin with, as an unregistered charity, but having a formal constitution, standing orders, meeting agendas/minutes, etc.

It's way easier with an actual registered charity as I manage a few of these accounts fine.

 

[Oldgaloot]

Thanks all for the info and counsel.

If the IRS gets info from the UK about US citizens who may be concealing income etc does HMRC get anything in return, I wonder? Or is it just a one way street?

 

[87 027]

As someone who has to undertake Anti Money Laundering training annually it is drummed into us that we are personally liable and on the hook as individuals for a possible prison sentence quite aside from any failings on the part of our employer. The only defence is to follow the employer's procedures to the letter. And there is no 'de minimis' threshold. So while I might have a personal view on what is 'over the top' in a particular situation, I do have some sympathy for the position of the poor sod in the bank who has been tasked with updating a customer's information!

== Doublepost prevention - post automatically merged: 16 Aug 2025 ==

Or is it just a one way street?

To some extent it is, because the US doesn't have the same concept of 'non domiciled' that we do

 

[nlogax]

Thanks all for the info and counsel.

If the IRS gets info from the UK about US citizens who may be concealing income etc does HMRC get anything in return, I wonder? Or is it just a one way street?

FATCA is a reciprocal agreement so not a one way street, though I'm willing to bet IRS benefits most of all through this.

 

[zero]

Thanks all for the info and counsel.

If the IRS gets info from the UK about US citizens who may be concealing income etc does HMRC get anything in return, I wonder? Or is it just a one way street?

US banks, and banks in the 100 or so countries which have signed up to the Common Reporting Standard and Automatic Exchange of Information, are required to record your tax residency. If you tell your bank you are tax resident in the UK, they will report the relevant data to HMRC.

However, currently it is all self-declared anyway. Even though in most countries it is likely to be an offence to make a false declaration, there is no real way for banks to verify your tax residency. In particular, determining UK tax residency can be very complicated especially in edge cases.

So if you don't tell your bank, or you declare that you are not tax resident in the UK, they won't report that information to HMRC, particularly if you are a citizen and/or resident of the country where that bank is located.

In the other direction, since all US citizens are liable for US tax, it is easy for non-US banks to know whose details to report to the IRS, but if you don't live in the US, were not born in the US and have another citizenship, it is possible that a bank will not know and not think to ask.

Furthermore, FATCA is a separate thing and non-compliance can threaten a bank's ability to trade in the US. Evidently, given the number of Americans (including multiple-citizen Americans) who have UK accounts, many UK banks have decided that they should proactively ask customers to inform them of their US status, rather than just waiting for customers to voluntarily provide information.

Nonetheless, you can probably ignore the request unless/until Halifax threatens to close your account for not responding. I have not yet been asked to fill in such a form for my Halifax accounts myself, but they have sent me several communications which included a sentence about being required to tell them if I have any US status (which I don't).

Also, my Halifax app recently asked me to confirm my personal information was correct. The information included my citizenship, income and expenses. For Halifax, it was possible to skip this, but other UK banks have also asked me to confirm my citizenship and other information (without mentioning the US) and it was not possible to continue accessing their app/website without confirming it.

 

[Gaelan]

At least UK banks seem to consistently *have* FATCA procedures - from what I've heard, in other countries, they "solve" the FATCA problem by simply refusing to take any US citizens as customers.

 

[simonw]

Banks have reported interest payments to the HMRC for many yeats. Nothing has changed.

 

[jfollows]

Until 2016 banks also used to deduct income tax from savings interest, the current system is better and came about because of a tax free savings allowance which varies by individual, but means the majority don’t pay any tax at all.

 

[JamesT]

Banks have reported interest payments to the HMRC for many yeats. Nothing has changed.

The major change was back in 2016 when the personal savings allowance was introduced. Before then they would withhold 20% tax on interest paid by default. Now they pay interest gross but report it to HMRC who adjust your tax code to account for any tax that needs paying.

 

[jfollows]

I used to bank with Barclays but in the 1980s they annoyed me by being silly about my overdraft - I had paid in a cheque to cover it but they still sent me a snotty letter and when I complained they used the old nonsense about taking days for the money to clear. So I ditched them and have been with NatWest since.

 

[simonw]

The major change was back in 2016 when the personal savings allowance was introduced. Before then they would withhold 20% tax on interest paid by default. Now they pay interest gross but report it to HMRC who adjust your tax code to account for any tax that needs paying.

Quite 2016 is a world away. Nothing to do with Labour

 

[Halwynd]

Until 2016 banks also used to deduct income tax from savings interest, the current system is better and came about because of a tax free savings allowance which varies by individual, but means the majority don’t pay any tax at all.

The current system is riddled with data errors, prone to incorrect assessments and taxes people on a preceding year basis, irrespective of transactional and interest rate changes. HMRC have assessed incorrectly on ISAs, accounts held under Power of Attorney, and other accounts where erroneous data has been supplied by the banks. HMRC do not even automatically provide statements so that you can check to see whether you are being taxed correctly - you have to request them. I recently requested a statement (BBSI) but it never arrived, ultimately I had to complain and it took several months before I found out I had been assessed incorrectly. When I rang HMRC to tell them, the operator simply deleted the figures on my say so - no evidence required. He told me he dealt with such errors every day.

 

[jfollows]

The current system is riddled with data errors, prone to incorrect assessments and taxes people on a preceding year basis, irrespective of transactional and interest rate changes. HMRC have assessed incorrectly on ISAs, accounts held under Power of Attorney, and other accounts where erroneous data has been supplied by the banks. HMRC do not even automatically provide statements so that you can check to see whether you are being taxed correctly - you have to request them. I recently requested a statement (BBSI) but it never arrived, ultimately I had to complain and it took several months before I found out I had been assessed incorrectly. When I rang HMRC to tell them, the operator simply deleted the figures on my say so - no evidence required. He told me he dealt with such errors every day.

I don’t disagree, and hence I send in a self-assessment every tax year, usually on 6 April.
I was pleased to be able to set up my tax codes correctly online this year; a couple of years ago it took three letters before they got it right.
The one other time I tried calling them I was told lots of stuff I already knew but the one thing I rang for proved too hard, I was promised that it would be resolved, and it wasn’t. Fortunately this only took one letter to resolve.

 

[StoneRoad]

* angry screeching noises *

OH and I both spend countless hours annually dealing with banks and HMRC for business, personal and charitable organisations.
It's a nightmare of unnecessary complexities, and it doesn't help that you can't, easily, go into a branch / office and see someone.

Furthermore, I know of at least two heritage based charitable trusts that have had one hell of a job getting bank accounts set up, even before you get into the on-line aspects. Not to mention the inevitable hassles when dealing with VAT / Gift Aid, especially the former.

 

[Oldgaloot]

The system hasn't improved since the 2016 change. Tax was deducted and you didn't have anything else to do unless you were a higher rate taxpayer and the additional tax was dealt with in your self-assessment or you had enough personal and other allowances to cover your income and you claimed a refund. I couldn't see what was wrong with that but George "Pasty Tax" Osborne knew better, of course.

It now takes at least a year to get your code adjusted to the right figure and further time to get your liability finalised. If you do your tax online you get a little message telling you not to expect anything final for months.

Since COVID HMRC has been a mess. I don't wish to offend anyone but I think everyone should be back in the office.

And as for Halifax? If I give them the info they ask for and already have will they do anything useful with it.

 

[DarloRich]

Is your bank annoying you? Nope.

The Hong Kong & Shanghai Banking Corporation leave me alone.

 

[jfollows]

It now takes at least a year to get your code adjusted to the right figure and further time to get your liability finalised. If you do your tax online you get a little message telling you not to expect anything final for months.

I don’t agree.
I got my tax codes amended online easily.
I finalised my liability for 2024-25 on 6 April. I am paying 1/9 of the amount due into a savings account each month with a view to pay the tax bill by the end of January 2026.
If HMRC decides that my figures are wrong, then fine, so be it, but they aren’t.

 

[LYradial]

Is your bank annoying you? Nope.

The Hong Kong & Shanghai Banking Corporation leave me alone.

And me, no problems

 

[Oldgaloot]

If like jfollows you're due to pay a tax bill in January 2026, you must be making a self-assessment. Like many others my tax code is reduced by an estimated amount to (try) to take account of other income. I can assure readers that it then takes a year to get the right figure.

Tongue in cheek I'd mention that HSBC do have a really good track record of leaving people alone which is why they've had to pay huge fines.

 

[jfollows]

If like jfollows you're due to pay a tax bill in January 2026, you must be making a self-assessment.

Yes, which is why I said in Post #19 above that I prefer to do a self-assessment not least because of the incompetence of HMRC. I think we’re off-topic, though!
I choose not to add the amount owing to the following year through my tax codes. It’s hardly millions of pounds in my case.

 

[nlogax]

And me, no problems

Meanwhile,

 

[m0ffy]

I wouldn’t describe it as particularly annoying. Now, dealing with SOX compliance in a UK business, that superheats my bladder.

 

[DarloRich]

Meanwhile,

View attachment 186509

no idea what that is - my wages are paid in and my bills and mortgage are paid out. I don't even get a statement anymore!

 

[Oldgaloot]

Has anyone managed to get any coherent explanation (or clue even) from their bank as to why they are troubling them?

It is annoying. It's all to do with the IRS trying to catch tax defaulters. Fair enough. But my only financial connection with the US is the ludicrous sums of money spent in the Florida theme parks. So what makes my bank think I might be a US citizen or resident other than in the UK? Grrrrr!