Introduction

The Building Societies Association represents mutual lenders and deposit takers in the UK including all 45 UK building societies.  Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of £245 billion, 20% of the total outstanding in the UK.  They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK.  Mutual deposit takers account for 31% of cash ISA balances.  They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.

Key points

1. We have seen the response made by Skipton Building Society and endorse wholly the contents thereof.  We agree there has to be consistency with the UK/US IGA in all aspects of the CD IGAs.   While there may be slightly different obligations under the IGAs with the US, the more similar the interpretations for all IGAs, the lower the likelihood of any errors.  Any deviation, however small, increases the cost of systems and compliance work for our members.

2. We therefore agree that the crown dependencies’ intergovernmental agreements should be aligned as closely as possible with the UK/US IGA.  This will help ensure that our members’ systems development work for the US/ UK IGA will deal with most of the requirements for the other IGAs.  It follows that we believe the FATCA IGAs and G5+ guidance should be in the same document.

3. We would also like HMRC to make clear the status of the G5+ IGAS in relation to the EU Savings and Tax Directive: for example, whether they will replace or be in addition to the EUSD requirements.

4. It is possible that a few of our members have reportable accounts under a UK/ CD IGA but not under the UK/ US agreement.  We do not know how many; we do not hold that information.  But we can say that many of our members are at least part the way through their due diligence procedures for the purposes of the UK/ US agreement.  Some are already changing onboarding processes, T&Cs etc in light of the revised implementation date of July 2014.  While we have no figures, it is true to say that there will be significant additional costs attached to any reporting of data to the CDs.  This is clearly unwelcome in light of the burden imposed by the UK/ US agreement and other new initiatives imposed by other regulators, for example, the forthcoming CRD 4 package.  These hit smaller institutions such as building societies disproportionately hard.

HMRC consultation on implementing the United Kingdom’s agreements with the crown dependencies to improve international tax compliance