|In IRS Notice 2014-33, the IRS announced that calendar years 2014 and 2015 will be regarded as a transition period for purposes of IRS enforcement and administration of the due diligence, reporting, and withholding provisions. For this period, it was proposed that the IRS will take into account the extent to which a Financial Institution has made good faith efforts to comply with the requirements. The UK has not made any such announcements for transitional 2014 and 2015 reporting.
However, if a Reporting UK Financial Institution has taken all reasonable efforts to supply accurate information and to establish appropriate governance and due diligence processes, then they will be held to be compliant with the UK Regulations. This will be the case despite the occurrence of minor and administrative errors, or a failure to supply accurate information despite reasonable care having been taken. It is the view of HMRC that if the Financial Institution has made all good faith efforts for 2014 and 2015 reporting (as outlined in the IRS notice) then this will also constitute all reasonable efforts for the purposes of establishing compliance with the UK Regulations.
Note: If despite all reasonable efforts being taken to supply accurate information and to establish appropriate governance and due diligence processes no reportable accounts have been identified by the Regulatory reporting date then the Financial Institution is still obliged to make a return, even if it is a Nil return.