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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: United Kingdom Second Round Review (2018)

This report for United Kingdom has been published on 15 Oct 2018. You can browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Whilst most entities were prohibited from issuing bearer shares in 2015, a remaining small number of entities and arrangements (i.e. open-ended investment companies and unauthorised unit trusts) can still issue shares or units in bearer form and there are currently no mechanisms to identify the owner of such shares or units.  The United Kingdom should ensure that robust mechanisms are in place to identify the owners of shares or units in bearer form, or to abolish such types of share or unit.  
There is no legal requirement for the maintenance of information on the beneficial owners of general partnerships; limited partnerships; and Scottish general partnerships having at least one individual partner, when those partnerships do not have an on-going relationship with an AML obliged person in the United Kingdom.  The United Kingdom should ensure that beneficial ownership information is available for all limited and general partnerships, including Scottish general partnerships. 
Phase 2 Rating Factors Recommendations
Largely Compliant.  During the review period, the United Kingdom established the Registry of People of Significant Control, which provides public access to beneficial ownership information. However, the oversight of Companies House concerning the accuracy of beneficial ownership information filed was limited and triggered mainly by third-party complaints. Beneficial ownership information is also required to be kept with AML obliged persons if engaged by an entity or arrangement. However, some of the professional body supervisors have not demonstrated an adequate level of supervision during the review period. In January 2018, the UK created a specific body to ensure that supervisory standards are consistently high across all professional body AML supervisors but the impact of this development could not be fully assessed.   The United Kingdom should continue to monitor and strengthen its supervision and enforcement measures to ensure that adequate, accurate and up to date beneficial ownership information is available. 
   
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   There are no record-keeping requirements in line with the standard for limited partnerships formed under UK law, including Scottish limited partnerships (other than qualifying partnerships), with no UK resident partner and no business activity in the UK.   The United Kingdom should ensure that accounting records and underlying documentation in line with the standard are available for all relevant legal entities and arrangements. 
Accounting records and underlying documentation for legal entities (including companies, limited liability partnerships, limited partnerships and Scottish partnerships) which cease to exist through liquidation are not required to be maintained for a minimum period of five years.  The United Kingdom should require that accounting records and underlying documentation be maintained for liquidated entities (including companies, limited liability partnerships and Scottish partnerships) for a minimum period of five years. 
Phase 2 Rating Factors Recommendations
Largely Compliant.     
   
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The United Kingdom’s formal access powers would only apply for purposes of determination or assessment of the tax due by the requesting jurisdiction. As a result, the United Kingdom has not been able to gather information to support the debt collection processes of its exchange of information partners.   The United Kingdom should ensure it has powers to access information to respond to requests for information in relation to enforcement of tax claims from its exchange of information partners, where the taxes are covered by the relevant EOI instruments. 
Phase 2 Rating Factors Recommendations
Partially Compliant.  The formal process to obtain information (other than information already in the possession of HMRC or information which is voluntarily provided to HMRC) is complex and on average takes 12 months to complete before information is provided to the requesting jurisdiction. This process unduly delayed effective exchange of information during the review period. It has also sometimes created an undue burden to requesting partners, some of whom considered that they had to provide a considerable amount of details on their investigation, which were occasionally beyond the foreseeable relevance standard, to support the UK processes.   The United Kingdom should ensure that its procedure for accessing third party information is compatible with effective international exchange of information in tax matters.  
The United Kingdom did not exercise its formal access powers to reply to some requests regarding UK legal entities where the requested information was kept outside the UK and there were no UK resident directors or partners. Whilst there are applicable sanctions for non-compliance with the maintenance or provision of information in such cases, the UK considers that those sanctions would not be effective to ensure access to information where there is no UK resident director, partner, or other information holder.   The United Kingdom should exercise its information gathering powers to access information from any person within the UK’s territorial jurisdiction, including legal persons in the cases where their management or partners are not in the UK territory. If those powers are found to be insufficient to compel the production of the information in practice, the UK should take appropriate measures to ensure that accounting records and underlying documentation can be obtained in all relevant situations in line with the standard. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.   This element involves issues of practice. Accordingly, no determination on the legal and regulatory framework has been made.   
Phase 2 Rating Factors Recommendations
Compliant.