HMRC being nosey?

BritOnTheProwl

Hi
One of my colleagues just surprised me by saying that UK banks are required to notify HMRC about deposits even into personal accounts above a certain limit.

They're welcome to my meagre amounts LOL and I suppose it's to combat crime, but is this really true?

Surely there must be some kind of data protection/privacy issue here??

tellmeitsfriday

Its most likely to ensure the tax element of interest payments is administered correctly (and possibly because they are nosey!)

LSEdwards

BritOnTheProwl wrote: »

Hi
One of my colleagues just surprised me by saying that UK banks are required to notify HMRC about deposits even into personal accounts above a certain limit.

They're welcome to my meagre amounts LOL and I suppose it's to combat crime, but is this really true?

Surely there must be some kind of data protection/privacy issue here??

Banks are required to send a Section 17 report to HMRC annually, providing information about all interest paid and tax withheld by account. This includes name and address of account holders.
http://www.hmrc.gov.uk/esd-guidance/s17-s18-si-reporting.htm

BritOnTheProwl

no...this was a comment that its specifically on large deposits (no idea what makes 'large') in order to identify transactions that need to be 'researched' further. Although it was supposedly for identifying crime it still sounds like an intrusion for the man on the street

eslick

its for money laundering and criminal activity legislation

LSEdwards

Section 4.1 of the guidance notes from the link I posted earlier sets out clearly that the report relates to all account holders.

kazwookie

Money laundering is why they have to do it, I know any transaction my company use to do over this amount, triggered loads of phone calls / possible visits to the bank etc etc before they would even consider moving the money.

LSEdwards

The purpose of the report is to allow HMRC to compare interest paid to interest declared on tax returns. It is not to do with AML.

BritOnTheProwl

Kazwookie's comment is more aligned to what I was speaking about.....

I was referring to transactions of a certain size that trigger 'investigation' as opposed to general levels of savings and interest (all of which is quite rightly subject to tax).....this was more to do with an assumption that a transaction above £X may be criminal....

Besides the principle.....any idea what level this is??

Must create all kinds of unneccessary hassle for people

zppp

BritOnTheProwl wrote: »

Kazwookie's comment is more aligned to what I was speaking about.....

I was referring to transactions of a certain size that trigger 'investigation' as opposed to general levels of savings and interest (all of which is quite rightly subject to tax).....this was more to do with an assumption that a transaction above £X may be criminal....

Besides the principle.....any idea what level this is??

Must create all kinds of unneccessary hassle for people

It is not simply about large amounts, it is also patterns of unusual transactions, large numbers of transfers (i.e. dozens per day). As for the amounts, banks can see where the funds have come from, be it CHAPS, abroad etc. Large is normally defined on account activity and thus is relevant to the normal turnover on the account. i.e. if you are on JSA, and suddenly recieve £10k into the account, this would be unusual to the account profile, and would be reported.

Likewise you could have someone who is self employed who gets paid £20k per month, so a £10k payment would not be out of the ordinary and thus it is unlikely to be reported. HMRC are involved on the Tax aspect and SOCA deal with money laundering. I encourage any member of my staff to report anything tht looks suspicious irrespective of the amount.

The law doesn't just apply to banks, it also does to solicitors, barristers, estate agents and accountants.

BritOnTheProwl

ahhhh excellent feedback Zipp.......this makes sense........so they'll probably not be too interested in my £25 cheques from ERNIE LOL