What is it?
Operational Tax is not really about traditional direct or indirect taxes, although some items of customer withholding taxes can be involved.
It is the umbrella term applied to the series of regimes set out by tax authorities (like HMRC in the UK) which Financial Institutions (FIs) have to follow in relation to their customers.
The majority of Ops Tax regimes centre around collecting, validating and maintaining customer and account data, backed up by annual reporting requirements.
Who does it impact?
All Financial Institutions will have Ops Tax responsibilities and requirements of some sort, but they will vary over different business and product types.
Domestic Ops Tax regimes in the UK include the ISA regime, which only applies to FIs who manage ISA products, and BBSI and OI reporting, which applies to all FIs who pay interest of some sort.
More international regimes, such as FATCA/CRS, apply to the majority of financial account products, whereas the US QI regime only applies to those who pay US income through their platform and have registered as a Qualified Intermediary with the IRS.
What we do about it?
For all regimes that apply to your FI, you should thoroughly assess the regulations for all aspects that apply to your business model and products.
Appropriate governance, policy and procedures should all be documented and in place for each regime and should be regularly reviewed for efficiency. They should also be reviewed every time there is a regulatory change, or a change to the business model or products.
Hartford specialists are skilled at personalising all of the above for individual businesses, and at the use of technology to ensure minimum error rates and the utmost efficiency.
Meet our Head of Tax Services Natalie Dowling
After over 8 years heading up Ops Tax and other Regulatory Operations for leading retail stockbrokers in the UK,
Natalie has spent the past few years in the professional services world, expanding her experience into all types and sizes of Financial Institution in the UK and EU.
Her extensive practical experience combined with regulatory knowledge provides the perfect background for assisting clients to truly understand their regulatory requirements, implement and change them in an efficient and cost-effective manner, and providing simple technology solutions for all aspects of the regimes.
Natalie feels just as comfortable rolling her sleeves up and showing clients how the ground level work is done, as she is presenting findings and recommendations to exec level stakeholders. To set up a meeting with Natalie and find out how she can help your Ops Tax efforts to be as efficient as possible, click here.
