To ask Mr Chancellor of the Exchequer, what estimate he has made of the total cost to the UK of the implementation of the US Foreign Account Tax Compliance Act in (a) the current financial year and (b) the following two financial years.
Answered on
14 July 2014
The estimate of the cost of the implementation of the US Foreign Account Tax Compliance Act (FATCA) set out in the Tax Information and Impact Note that accompanied the Regulations to implement the UK-USA Intergovernmental Agreement. The Tax Impact Note estimates thatthe costs to United Kingdom Financial Institutions to implement the domestic law to allow the UK to be FATCA compliant will involve an initial investment of £0.9bn - £1.6bn, with an ongoing cost of £50 million - £90 million a year.
This is a reduction to the estimated costs of an initial investment of £2-3billion, with ongoing costs of £100m - £170m a year that United Kingdom business would have faced if they had to report to the United States directly in accordance with United States Treasury Regulations.
The initial investment costs have not been allocated to any financial year, but the ongoing costs are expected to apply for both the current, and the following two financial years.