New UK Common Reporting Standard Rules: Registration Imminent

New UK Common Reporting Standard (CRS) rules will introduce mandatory HM Revenue & Customs (HMRC) registration requirements for UK investment managers and other financial institutions next month.

The International Tax Compliance (Amendment) Regulations 2025(the 2025 regulations) require that all UK investment managers must register with HMRC by December 31, even if they have no reportable "financial accounts".

Although the change will increase HMRC oversight, it is important to note that it will not add any annual reporting where there are no reportable accounts. A new penalty framework has also been designed that will apply for failure to comply, including failure to register and any other compliance breaches. The 2025 regulations will also adopt selected optional CRS clarifications and extend certain due diligence timelines.

Who will be affected?

As mentioned above, all UK investment managers will be required to register with HMRC by the end of the year; these include FCA-authorised fund managers, portfolio managers, alternative investment fund managers (AIFMs), and other entities managing investments on a discretionary basis.

The vast majority of UK investment managers (including FCA-authorised managers) are already reporting financial institutions for CRS. However, those who do not hold reportable accounts at manager level will now need to register too. It is imperative that UK groups confirm CRS status for each UK entity, not just the manager.

Headline changes

Implementing the Organisation for Economic Cooperation and Development's (OECD) 2023 CRS update, the 2025 regulations align with the Cryptoasset Reporting Framework(CARF). The headline practical changes for UK investment managers are:

• Mandatory HMRC registration. Reporting financial institutions and certain specified non-reporting financial institutions must register. This is a one-off registration but is required even if the manager has no reportable "financial accounts".
• No new reporting where there is nothing to report. Managers without reportable accounts remain outside annual CRS filing; the focus is registration and HMRC visibility.
• Reformed penalty regime. Penalties now cover failure to register, due diligence and record keepingfailures, and late/inaccurate returns, with daily accruals forcontinued non-compliance.
• CRS interpretation and optional text. The UK incorporates selected optional CRS commentary (including "qualified non-profit entity") and provides for HMRC-published lists of reportable and participating jurisdictions.
• Timing updates. Extended deadlines to meet "qualified credit card issuer" and "excluded account" statuses ease transition to the updated CRS.
• Gross proceeds election. Reporting institutions may elect to report gross proceeds under CRS where CARF reporting applies: notification to HMRC is required by May 31 following the relevant year.

Timeline: key dates and compliance steps

The 2025 Regulations have been in force since July 16 but core operational impacts will only apply from January 1, 2026. However, the registration deadline is earlier:

Registration deadline. Register with HMRC on or before December 31 or, if later, January 31 of the year after the entity first falls within a relevant CRS/FATCA definition. Registration is by notice in the form and manner specified by HMRC.

Gross proceeds election. If electing to report gross proceeds under CRS, notify HMRC by May 31 following the end of the relevant calendar year. Elections roll forward until withdrawn.

UK investment managers: practical implications

For most UK investment managers, the immediate task is administrative. The one-offHMRC registration will need to be completed. Managers without reportable accounts will, in most cases, not have any annual CRS return to file. Investment managers should:

• Confirm CRS classification for each UK group entity and identify in-scopeentities.
• Register all in-scope UK entities by December 31.
• Consider whether a gross proceeds election under CRS is desirable where CARF reporting applies.

Non-compliance: penalties and enforcement

Penalties will now apply not only for failure to register, but also for inadequate due diligence (including failure to obtain valid self-certifications), record keepingbreaches, and late or inaccurate returns. Daily penalties will be incurred forcontinuednon-compliance, which risks becoming very costly. "Reasonable excuse" safeguards will apply and duplicative penalties for the same act or omission are barred.

HMRC has already increased engagement with UK investment managers on historic compliance, and it is possible that they may also query any lack of prior reporting.

Interaction with CARF and FATCA

Importantly, the UK CRS is aligned with CARF; the gross proceeds election enables coordinated reporting across regimes.

In terms of the Foreign Account Tax Compliance Act (FATCA) the UK agreement is already updated. Managers must ensure that they continue to obtain and retain valid FATCA self-certifications where applicable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.