The UK has introduced tougher FATCA and CRS penalty rules, effective 16 July 2025, with new requirements for financial institutions and sharper consequences for compliance failures. Robin Silverthorne, Managing Director, Global Tax Services, examines the implications for businesses with UK financial institutions. From stricter self-certification provisions to mandatory registration with HMRC’s AEOI portal, these changes underscore the need to review onboarding, certification, and reporting processes — with a focus on being ready, not reactive.
The end of the 2025 FATCA and CRS reporting cycle coincided with the introduction of these new UK tax regulations, marking a notable shift in HMRC’s enforcement approach by substantially increasing penalty provisions and administrative burden under the FATCA/CRS rules.
Regulation 12 of the International Tax Compliance (Amendment) Regulations 2025 replaces the previous FATCA and CRS penalty rules with a far more detailed framework (Regulations 22A to 22N), clarifying the consequences when compliance fails.
One major compliance change concerns self-certification with clearer, more prescriptive penalties now in force. Institutions therefore need even greater certainty around due diligence provisions, to ensure they’re collecting valid self-certifications as required throughout the lifecycle.
Interestingly, HMRC have also introduced provisions to penalise ‘self-certification providers’ (individual or entity account holders, or even controlling persons) who do not provide self-certifications to a financial institution when required. This is a key development to drive completion of accurate self-certifications from account holders and controlling persons, who until now would suffer no HMRC penalty if no self-certification was provided on request.
Another key administrative update requires all financial institutions to register with HMRC’s AEOI portal, even if they do not currently hold reportable accounts. Until now, investment advisers and other reporting financial institutions without FATCA and CRS reporting obligations were not obliged to register. Now they have until 31 December 2025, or risk facing non-compliance penalties.
A wake-up call
This is a wake-up call for anyone managing or advising funds. Now is the time to review onboarding, certification, and reporting processes. These penalties aren’t theoretical—they’re enforceable, and they’re steep.
Sonata One’s single investor interface is perfectly placed to help you navigate FATCA/CRS investor due diligence and reporting across private markets.
The new rules are here – don’t wait for a compliance issue to catch you off guard.
