The Guidance Notes for savings income reporting requirements have been updated to provide a consolidated resource for details on how to report; details on how the directive effects UK investors; how to applying for a certificate; a link to the various updates on the Directive from 2004 to 2006 and reference documents.

European Union Savings Directive (Council Directive 2003/48/EC) was agreed on 3 June 2003 in order to counter cross border tax evasion through collecting and exchanging information about foreign resident individuals receiving savings income outside their resident state.

To implement the Directive, HMRC developed a scheme to collect information about the payment of savings income to certain overseas residents, and to exchange this with certain other countries. The scheme mainly affects banks, registrars, custodians and other financial institutions that make interest payments to individuals in prescribed territories. It also affects market operators who purchase money debts from individuals in prescribed territories or redeem money debts held by individuals in prescribed territories.

The Directive is also relevant to those who hold or administer money debts on behalf of others and those who advise paying agents such as accountants, tax advisers or solicitors. If you think you might fall into one of the above categories then you should look at the guidance that has been produced by HMRC. The Directive is also of relevance if you are a UK resident individual and have money invested overseas or represent such an individual.

Full guidance is available on http://www.hmrc.gov.uk/esd-guidance/sir-guidance.pdf. Also, see story under the International Tax section for the current work at EU level on the Savings Directive.