Unexpected request to confirm tax residency - Halifax

Ladylove

Thanks for that. Made sure bank manager had these relevant details before we left.
Had only just opened the account so he should have done this at the time.
Everyone seems to be running scared about money laundering etc., but still
think bank could have handled the whole thing in a much more professional way.
Still don't trust the letter though.

booksurr

Ladylove wrote: »

We made an appointment with our bank manager to get the thing ironed out.
Letter is genuine much and all that it's appalongly unprofessional

Ladylove wrote: »

Still don't trust the letter though.

so you physically met your bank manager who explained the situation to you, but you still think the letter is invalid?

totally illogical

missmoose

Ladylove wrote: »

Thanks for that. Made sure bank manager had these relevant details before we left.
Had only just opened the account so he should have done this at the time.
Everyone seems to be running scared about money laundering etc., but still
think bank could have handled the whole thing in a much more professional way.
Still don't trust the letter though.

I don't think this is about money laundering at all, in my job I have to do money laundering checks and we NEVER as for NI number. DOB, Address and ID yes but not NI number.

A friend of a friend works at Halifax so I asked her about it and she said that people are randomly being sent it, the in branch staff aren't sure why but that I can go in branch update my details there then bin the letter and forget about it. So that's what I will be doing.

Ladylove

Sounds like it's obvious you are..and always have been a UK resident.
Your NI no. and DOB are none of their business and your tax affairs
are your private business also.
I intend just putting N/A on mine and leaving it at that.
The whole thing is a waste of time anyway as USA...and
President Trump are repealing the law regarding tax residency..so what you are effectively doing
if filling some nosy persons brain will all your private information...so
think carefully

badmemory

Unfortunately the USA repealing their laws will not stop it happening as they have made us write it into our law. Also he may say he will repeal, but unless it helps his tax affairs he won't & may even ramp it up. After all who would you rather upset, someone who lives a few miles away or a few countries away?

bowlhead99

It's not just the USA. At the same time the UK signed its agreements with the USA it also created a bunch of agreements with its crown dependencies and overseas territories for reciprocal exchange of information (to get banks and brokers and investment firms in Channel Islands and Isle of Man and Cayman etc to send info to UK, with UK financial institutions sending info the other direction on crown dependencies residents with accounts in UK).

That has now expanded further with the UK signing up to the OECD's "Common Reporting Standard" ; under CRS, financial institutions send info to HMRC who share it with 100+ foreign tax authorities just like HMRC sends info they collect on US people to the IRS.

So, automatic exchange of information for tax purposes is not going away even if The Donald decides to repeal any of his rules that identify US taxpayers with foreign accounts, because 100 other countries are all multilaterally sharing information starting with 2016 data.

Basically the banks have to submit annual reports to HMRC and the only way they can be happy that those reports are correct is by reviewing customer data of their existing customer base. A self-certification of tax status is one of the tools by which they do this. Some banks will choose to spend a lot more money on analysis and target the requests. Others will choose to save money on these costs of compliance - so they can offer you banking services more cheaply and pay better interest rates - and use blanket coverage of the customer base via self-certification. Seems some are doing it by outsourcing it to a firm that charges them fewer millions of pounds and doesn't make the forms all glossy and colourful.

The charges that it is 'disgusting' that a bank should be allowed to ask whether you have any non-UK tax residencies, and what your national insurance number is, and request that you agree to inform them if your tax residence status changes, are somewhat overblown.

Similarly, so is the accusation that they are harvesting your private information under the guise of 'legal gobbldegook'.

They are providing you with regulated financial services in a first-world country with advanced data protection laws, and operating in an environment where our tax authority requires them to be able to accurately ascertain tax residence and report tax IDs, and in which our financial regulator requires them to have properly identified their customer, and documented it. In that context, for them to ask for you to sign off your country of tax residence and provide a tax ID is not outrageous is it? Especially if you are a foreign resident or a foreign citizen who happens to be in the UK but could easily be in Poland or France or Australia for 190 days a year for all they know. Nor is asking for a proof of ID or residence in the few instances where your answers may be inconsistent with their records.

Some people will say, "Well thats all very well for them to collect information from the dirty foreigners, but I have had an account with Lloyds since I saw that nice Mr Smith at my local village branch in 1957, how DARE they say they would like me to confirm I am only a resident of the UK. I am likely more British than them, down to my union jack underpants!".

But from the banks perspective, the only 'know your customer' information they have on file is that you are a longstanding account which is missing a date of birth and tax ID, and they would prefer to have those on file rather than make an incorrect assumption. Mr Smith didn't ask for it in 1957, he knew you as Dave the Grocer's son, but the world has moved on.

On the letter, it no doubt says if you don't return the form promptly there could be consequences such as your account being misclassified which can lead to further problems, compliance costs for them, maybe hassle for you. You can write to the CEO of the bank if you like, absolutely livid about them using a "threatening tone". However, if the letter had said, "don't worry, if nobody replies to these requests, there is absolutely no consequence to anybody, so you might as well not bother", that would not really be true, and it would not encourage you to fill out the form. So, a letter requesting you reply within a few weeks to help them meet their deadlines is hardly a descent into Fascism.

All that has happened here is the bank cheaped out on their communications (because they have millions of customers to get through and implementing the HMRC regulations is a thankless task that they get very little value out of) and did not make it look expensive and official enough, and didn't brief bank staff well enough that the exercise was ongoing (because they were trying to outsource it and not redeploy a lot of internal staff on training courses to handle it). So, a customer service failure.

But not something that is absolutely disgusting and worthy of £50 of compensation for all your heartache and distress. Even if you are a person with a medical condition who has been flummoxed about why a bank who reports his interest figures to HMRC might want to know date of birth, NI number, countries of tax residency. The banks periodically warn people to ignore communication which may not be legitimate. So, feel free to take that advice and not reply. That dilemma doesn't cost you £50 of heartache.

If you don't return the form because it doesn't look legit, the worst they are going to do is keep sending you letters, or give up and then either perhaps classify you correctly as a UK-only resident using the info they have, or perhaps report you to HMRC as undocumented, or perhaps report you to HMRC as the wrong classification. Those are literally the only outcomes.

If your date of birth and NI numbers are not in their records properly then they can't give to HMRC tagged to your interest and balance figures, so HMRC's process to match people to how much interest they got, might go awry. It would be more useful for HMRC to be told that this £100 interest paid to Joe Bloggs was the Joe Bloggs born 1/1/1980 with NI number AA123456A, rather than just 'Joe Bloggs', because in the latter case you are likely to get mixed up with other Joe Bloggses with £100,000 of interest.

As a Lloyds customer who hasn't received one of these in the year or so since the thread has been running, I haven't needed to fill it in and sign, but would be happy to do so if I was satisfied that the place I was sending it was an address that Lloyds are actually using. If it was an address I couldn't google and the letter was unbranded I would probably leave it.

You can read more about AEOI (automatic exchange of information by financial institutions and governments for tax purposes) here. http://www.gov.uk/guidance/automatic-exchange-of-information-introduction

badmemory

bowlhead99 wrote: »

As a Lloyds customer who hasn't received one of these in the year or so since the thread has been running, I haven't needed to fill it in and sign, but would be happy to do so if I was satisfied that the place I was sending it was an address that Lloyds are actually using. If it was an address I couldn't google and the letter was unbranded I would probably leave it.
/QUOTE]

If you ever do receive one of these letters you may feel differently. I would have filled the form in with no hesitation, if only it didn't look so fraudulent, with a return address that made no mention of a bank or even Ernst & Young the accountants who were dealing with it for them. The postcode was not associated with either of them. The English was bad etc etc.

I think anyone filling it in without question could have difficulty if fraud was committed on their accounts. It shows a lack of care with their security and is one of the things that have been suggested to avoid the banks needing to refund fraud.

xylophone

All that has happened here is the bank cheaped out on their communications (because they have millions of customers to get through and implementing the HMRC regulations is a thankless task that they get very little value out of) and did not make it look expensive and official enough, and didn't brief bank staff well enough that the exercise was ongoing (because they were trying to outsource it and not redeploy a lot of internal staff on training courses to handle it). So, a customer service failure.

For which compensation would normally be paid/expected?:)

bowlhead99

xylophone wrote: »

For which compensation would normally be paid/expected?:)

No.

"I received a letter which was not printed on the usual high quality paper and didn't have the company logo. When I spoke to someone in a branch about it, they had not been briefed about the tax data remediation project that their company had outsourced to a third party. Both of these are examples of poor service."

"Sorry madam we will try to improve our processes for next time"

"Pay me £50"

"What?"

"Pay me for receiving a letter from you that was not very well typset and for not all of your 45000 employees being fully aware of this particular project"

"Madam, you are receiving banking services and paying little to nothing for them. From time to time you receive correspondence. Why would you need compensation equal to over five hours pay at minimum wage for receiving a letter which you were not sure was genuine. Why not simply throw it in the bin, or send it to us and ask about it?"

"Paymepaymepaymepayme. You are all disgusting. I have never been so badly treated in all my life. It is horrendous what you lot are doing"

"!!!!!!, someone send this [!!!!] some money to shut them up".

Compensation culture at its finest.

badmemory

I assume you are referring to me in that tirade. I specifically did NOT ask for compensation. What I asked them for was a promise to improve their method in the future. They asked me if I felt that £50 was enough compensation and I said that I wasn't looking for compensation, they asked me if I wanted compensation for my phone bill, I said no. They do not seem to have improved their process (ie not kept their promise).

I am positive you cannot have received one of these letters or you would know why we are complaining. IT IS very worrying to get a threatening letter that you have to respond to that you feel is fraudulent.