UK 2025 CRS Compliance Update with New Penalties

UK Updates CRS Guidance

As the global tax landscape evolves, the UK has taken a decisive step forward with the International Tax Compliance (Amendment) Regulations 2025. These amendments, in force effective 16th July, 2025, not only align the UK’s framework with the OECD’s updated Common Reporting Standard (CRS) and Crypto-Asset Reporting Framework (CARF), but they also introduce a new era of enforcement where penalties are precise, targeted, and potentially costly.

A New Penalty Framework: Precision Meets Pressure

The 2025 regulations introduce Regulations 22A to 22N, a comprehensive suite of penalties designed to enforce compliance of reporting financial institutions across due diligence, reporting, and record-keeping obligations. Here are the key highlights:

Failure to Apply Due Diligence Procedures (Regulation 22A)

• Up to £100 per account holder or controlling person for failing to apply due diligence procedures.

• Up to £300 per account holder or controlling person if the failure involves not obtaining a valid self-certification under CRS or FATCA.

Failure to Comply with Record-Keeping Requirements (Regulation 22B)

• Up to £5,000 per reportable period for failing to maintain required records under Regulation 3(2A) or 3(2B).

Failure to Submit Returns Timely or Provide Complete and Accurate Information (Regulations 22C–22G)

• Penalties range from £100 to £600 per failure

• After notice, penalties of at least £100 per day will continue for non-compliance.

• Consideration will be made if inaccuracy or incompleteness is deliberate or there was a failure to take reasonable care.

Time Limits and Assessments (Regulation 22L)

• HMRC must assess penalties within 12 months of the failure being identified and within 6 years of when the FI became liable to the penalty.

Appeals and Reasonable Excuse (Regulations 22M–22N)

• Institutions may appeal penalties or argue a “reasonable excuse” defense, but the burden of proof lies with them.

Strategic Implications for Financial Institutions

These penalties are not just financial, they will be operational and reputational. Institutions must now:

• Reinforce due diligence protocols to ensure valid self-certifications are collected and verified.

• Audit record-keeping systems to confirm compliance with retention and accessibility standards.

• Train staff on the nuances of CRS and FATCA obligations, especially in light of the new penalty structure.

• Implement monitoring tools to detect and correct compliance gaps before they trigger enforcement.

• Creating these artifacts will provide support of Reasonable excuse (Regulation 22I) which can eliminate penalty liabilities that the FI fulfilled its obligations under regulation.

Compliance as a Competitive Advantage

The UK’s 2025 amendments send a clear message; compliance is no longer a back-office function but instead is a boardroom priority. Institutions must start collecting, validating, and retaining self-certification forms to operate. Any FI that treats these changes as an opportunity to modernize their tax governance will not only avoid penalties but also build trust with regulators, clients, and partners.

For financial institutions, this is a wake-up call. In a world of increasing transparency, proactive compliance is the new currency of credibility.

How Can TAINA Help?

The changing legislation around CRS 2.0 paired with the increased CRS enforcement seen around the world has further increased the risk for financial institutions. It is more important now than ever to address your financial institution’s CRS validation process. The TAINA Platform takes care of your CRS self-certification compliance in a seamless end-to-end process whilst maintaining an up to date, robust and detailed CRS ruleset. 

TAINA’s fully automated FATCA and CRS Validation Platform can help financial institutions lighten their compliance burden whilst improving efficiency, reducing cost, mitigating risk, and improving their overall customer and investor experience. 

We would love to talk to you more about your current documentation validation process and how our award-winning CRS self-certification form Validation platform may add value to your organization.

For more information on how our fully automated platform can add value to your business, get in touch or request a demo to see it in action.