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What is the Common Reporting Standard (CRS)?
A piece of legislation that's a critical tool in the worldwide fight against tax evasion.
Here's the gist
The Common Reporting Standard (CRS) is a global standard for the automatic exchange of financial account information between governments.
CRS helps fight against tax evasion around the world and protects the integrity of systems by improving transparency.
It needs all Financial Institutions including companies within Lloyds Banking Group, who operate in Participating Countries, to gather certain customer information. They then report it to local tax authorities.
How it works
Governments around the world have introduced standards to allow increased sharing of information between tax authorities. This is under a framework known as Automatic Exchange of Information (AEoI). One piece of legislation is the Common Reporting Standard (CRS).
So far more than 100 jurisdictions have committed to adopting the CRS including the UK. It also includes areas with their own distinct tax regulations such as Jersey, Guernsey, Isle of Man etc. Any reference to countries in the FAQs relates to all jurisdictions who have committed to adopting the CRS.
The full list of in-scope jurisdictions is available on the OECD website.
To comply with the CRS, Participating Countries must collect certain customer information from their Financial Institutions. They exchange that information on a yearly basis with other Participating Countries.
In the UK, we must complete CRS reporting to HM Revenue and Customs (HMRC) by 31 May every year in respect of customers we have identified as Reportable Persons or Reportable Entities.
Let’s take a closer look
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Under CRS, we must identify customers that are a tax resident in one country with Financial Accounts held in another. This is for inter-country reporting purposes.
If you are a UK tax resident only, and only hold Financial Accounts in the UK, then you won’t be reported by any UK companies. But you may be asked to confirm your tax residency.
If this applies to you, we’ll write asking you to complete a Tax Residency Self-Certification form, and document proof of tax residency. Other reasons we may send you a Tax Residency Self-Certification form could be:
- You have opened a new account;
- You changed the personal details we hold for you; or
- A review of your accounts has indicated that we don’t hold up to date information on your tax residency or whether you are a US citizen.
We may also need you to contact us so we can update the information we hold, such as:
- Taxpayer Identification Number (TIN)
- National Insurance Number
- Date of birth
Local tax authorities would need certain information on Reportable Persons / Reportable Entities and their Financial Accounts.
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Lloyds Banking Group must report to the local tax authority the customers with a Financial Account who are tax resident in one Reportable Country but with Financial Accounts held in another. The local tax authority will then pass this information onto the Reportable Country where it has been established that the customers are resident for tax purposes.
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We may write to you asking you to fill in a Tax Residency Self-Certification form. It’s very important you complete this document. Otherwise, you may receive repeated requests until we collect the necessary information.
You might also like
Common Reporting Standard FAQs
Understand the Common Reporting Standard (CRS) and why Halifax needs to comply.
Common Reporting Standard glossary
Some quick definitions of some common tax compliance jargon.
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