|Significant non-compliance may be determined from either an IRS or HMRC perspective. In either event, the relevant Competent Authorities will notify the other regarding the circumstances.
Where one Competent Authority notifies the other of significant non-compliance, there is an 18 month period in which the Financial Institution must resolve the non-compliance.
Where HMRC is notified of or identifies significant non-compliance by a UK Financial Institution, HMRC will apply any relevant penalties under the legislation.
HMRC will also engage with the Financial Institution to:
HMRC will inform the IRS of the outcome of these discussions.
In the event that the issues remain unresolved after a period of 18 months then the Financial Institution will be treated as a Non-Participating Financial Institution.
The following are examples of what would be regarded as significant non-compliance include: