With effect from 1 January 2026 the UK formally adopts the latest version of the Organisation for Economic Co-operation and Development’s (OECD’s) Common Reporting Standards (CRS) (often referred as “CRS 2.0”) under HM Revenue and Customs (HMRC)’s recently updated International Tax Compliance (Amendment) Regulations 2025. This update is aimed at improving the effectiveness of the UK’s implementation of the existing CRS and the United States’ Foreign Account Tax Compliance Act (FATCA).
According to the HMRC website,” the FATCA and CRS rules require financial institutions to:
“Identify accounts maintained for specified persons (account holders and controlling persons who are tax resident in jurisdictions with which the UK has entered into an agreement to exchange information) across a wide range of financial accounts and investments to help tackle tax evasion and collect and report information in a specified manner on specified persons to HMRC.”
CRS 2.0 Brings EMIs Within Scope
For the first time, certain e-money products and therefore Electronic Money Institutions (EMIs) fall explicitly within scope of the CRS.
Where previously EMIs operated outside the CRS reporting frameworks, they now face comparable obligations to those long imposed on banks, fund managers and custodians. In short, being an EMI in 2026 means becoming a full participant in the global Automatic Exchange of Information (AEOI) regime, with all that entails.
What CRS 2.0 Means — Expanded Scope, Stricter Rules
The revisions to the CRS are far from minor. The new standard reflects the evolving nature of financial services: digital wallets, e-money accounts, and even central bank digital currencies are now classified as reportable financial accounts under CRS 2.0.
Key enhancements include:
- Wider Account Coverage
A ‘Reporting Financial Institution’ now includes any ‘Financial Institution’, which in turn encompasses ‘Depositary Institutions’. Notably, this also includes firms that “hold a Specified Electronic Money Product.”
A Specified Electronic Money Product is defined as: “Digital representations of a single fiat currency that are issued on receipt of funds for the purpose of making payment transactions, that are represented by a claim on the issuer denominated in the same fiat currency, and that are accepted by a natural or legal person other than the issuer.”
This closely mirrors the definition of electronic money under the Electronic Money Regulations 2011. As such, EMIs will likely need to treat many of their customer balances as reportable CRS accounts.
The primary exclusion applies if funds are held for less than 60 days and/or are solely for the purpose of transferring from a customer to another person.
- Stricter Due Diligence
Requirements have been tightened around self-certification, identification of controlling persons, and declaration of tax residencies. Notably, dual-resident account holders can no longer rely on “tie-breaker” rules under tax treaties; all relevant jurisdictions must be disclosed.
- Mandatory registration with HMRC
All UK reporting financial institutions, even if they expect no reportable accounts, must register with HMRC for the AEOI by 31 December 2025.
- Review of Existing Accounts
Firms must review their books and records as of 31 December 2025 to identify any reportable accounts (individual or corporate). From that date onward, systems and controls must be in place to identify and collect the necessary data for all newly opened accounts.
- Annual Reporting to HMRC:
EMIs must report Reportable Accounts held by overseas persons or those with overseas Ultimate Beneficial Owners (UBOs).
- New Sanctions for Non-Compliance:
Updated penalties cover failures such as not identifying reportable accounts, inaccurate reporting or late submissions.
For EMIs, these changes are expected to result in more intensive onboarding, customer screening, data collection and ongoing compliance obligations than previously anticipated, assuming they were even aware of the requirements in the first place.
What EMIs Should Do Now
For any EMI operating (or propose to operate) in the UK, or marketing to UK tax residents, the time for action is almost up.
Key Actions:
- Determine your CRS status: Assess whether your business qualifies as a Reporting Financial Institution under the updated definitions. Even if you do not hold traditional deposit accounts, e-money balances may now qualify, subject to any exemptions.
- Register with HMRC: In accordance with the 2025 regulations, all EMIs must register by 31 December 2025, regardless of whether any reportable accounts are currently held.
- Upgrade onboarding and KYC processes: Ensure the collection of valid self-certifications, tax residency information and beneficial ownership details at the point of account opening.
Dual-residence must now be recorded for all applicable jurisdictions, tie-breaker assumptions are no longer valid. - Update data capture and reporting systems: Implement or upgrade systems capable of collecting, storing and reporting account data in the HMRC-mandated format from 2026 onwards. Ensure audit trails are embedded.
- Train staff and engage with customers: Front-line and compliance teams must be trained on the new obligations. Prepare communications for customers explaining what data is collected, why it’s needed, and how it will be used.
How Complyport Can Help
Complyport has extensive experience supporting Electronic Money Institutions, Payment Service Providers and other regulated firms with regulatory change and implementation.
We can assist your firm by:
- Conducting CRS impact assessments specific to your business model.
- Supporting your registration with HMRC and AEOI compliance.
- Reviewing and updating your KYC and onboarding frameworks.
- Advising on effective systems and controls for data collection and reporting.
- Training staff and drafting regulatory-compliant customer communications.
Our team of regulatory specialists can ensure that you remain compliant with the updated CRS 2.0 requirements and are well-prepared for the 2026 reporting obligations.
Book a meeting today with one of our Subject Matter Experts to ensure your EMI is ready for CRS 2.0.
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