BBSI Return: HMRC’s Bank and Building Society Interest Filing

Every February, HMRC issues Bank and Building Society Interest (BBSI) notices under Schedule 23 to the Finance Act 2011, and each one requires a BBSI return: the interest a bank or building society paid or credited during the UK tax year to reportable persons with UK addresses. HMRC’s published returns cycle runs the reported year from 6 April to 5 April and sets 30 June as the deadline, unless the notice states otherwise. HMRC uses the data to pre-populate customer tax accounts, to issue PAYE coding notices and tax calculations, and to check that Self Assessment returns are accurate and complete.

The return is a data file, and HMRC checks it like one. Its data quality software tests each submission against the prescribed format, a failed file is classed as outstanding until it is corrected and resubmitted, and the penalties in paragraphs 30 to 32 of Schedule 23 attach to a return that is outstanding or inaccurate. A categorisation error also lands on the customer: HMRC’s own worked example shows a club secretary’s account, reported as an individual, matched to her personal tax account and producing an incorrect tax charge.

Related reading: Deposit Reporting to Skat: The Indlån File Due 20 January 2027

Filing summary

Legal basis: the Schedule 23 data-holder notice behind every BBSI return

The BBSI return rests on a notice power. Paragraph 1(1) of Schedule 23 to the Finance Act 2011 lets an officer of Revenue and Customs, by notice in writing, require a relevant data-holder to provide relevant data; the Schedule calls this a data-holder notice. Part 2 lists who counts as a relevant data-holder, and paragraph 12(1) is the entry that captures deposit takers: “A person by or through whom interest is paid or credited is a relevant data-holder.”

Paragraph 12(2) treats four further items as interest for this purpose: a dividend on a building society share, the amount due on redemption of a deeply discounted security, a foreign dividend, and an alternative finance return. HMRC’s guidance points to paragraph 12 when it requires payments on Sharia-compatible accounts to be returned as if they were interest.

The content of the return comes from secondary legislation. Paragraph 1(3) leaves “relevant data” to Treasury regulations, supplied by the Data-gathering Powers (Relevant Data) Regulations 2012 (SI 2012/847). Regulation 5 makes the relevant data for an interest payer the information and documents relating to accounts or sums on which “relevant interest” is payable: interest paid or credited on money received or retained in the United Kingdom, with or without deduction of income tax. Regulation 6 removes certain payments, including those on certificates of deposit, on investments or deposits held at a branch outside the United Kingdom, and on investment plans under Chapter 3 of Part 6 of the Income Tax (Trading and Other Income) Act 2005.

Regulation 6(e) is the provision to read twice. As made, it excluded payments to persons other than individuals, with two narrow exceptions; an amendment from 1 September 2013 (SI 2013/1811) added another where the data-holder carries on a trade or business in which it receives or retains money so that interest becomes payable on it. I read that exception as the reason a bank’s return reaches companies, clubs and trustees.

The notice fixes the mechanics. Paragraph 4 requires the data to be provided by the means, in the form and, where they are to be sent somewhere, within the period reasonably specified in the notice. Paragraph 3 limits how far back a notice can reach: the data must be capable of bearing on periods ending on or after the first day of the four-year period ending with the day the notice is given. HMRC describes its BBSI guidance as its interpretation of the legislation; the binding terms on means, form and timing are those the notice specifies.

Unless the tribunal approved its issue, a notice can be appealed on three grounds under paragraph 28: compliance is unduly onerous (a ground unavailable for data in the data-holder’s statutory records), the recipient is not a relevant data-holder, or the data specified are not relevant data. Paragraph 29 requires the appeal in writing, stating the grounds, to the officer who gave the notice, within 30 days beginning with the date it was given.

Who must report a BBSI return: interest payers holding a notice, and the reportable-person test

HMRC’s guidance addresses UK banks and building societies, and the duty to file attaches when HMRC sends the notice. Paragraph 12 reaches further, to any person by or through whom interest is paid or credited, and HMRC runs a second return type, Other Interest (OI). The guidance names three kinds of other interest that may go on the BBSI return: interest building societies pay on permanent interest-bearing shares, interest local authorities pay or credit to individuals, and interest on some National Savings and Investments products. A payer not required to make a BBSI return reports those amounts on its OI return.

Within an institution, the population is every account on which interest was paid or credited to a reportable person with a UK address, individuals and non-individuals alike, from companies and clubs to executors and trustees. Accounts of persons with an address outside the United Kingdom are left out, including companies not resident in the UK. The guidance sets no size threshold, and it states that interest below the personal savings allowance is still reported, because the investor may hold more than one account and pays tax on the total.

The decision runs on know-your-customer data. HMRC does not expect further enquiries to establish this, or prior knowledge of a customer’s tax liability, but it does require accurate categorisation. For an individual, the residential address decides, and a correspondence address counts only where no residential address is held: HMRC’s example customer, with a UK correspondence address and a residential address abroad, stays off the return. For a company, the guidance uses the registered office, or a correspondence address where that is not held, so a company the bank suspects is French but whose only known address is in the UK is reported.

HMRC’s guidance lists the interest that stays off the return. Grouped by what triggers each exclusion:

Three structural points get thinner answers. None of HMRC’s BBSI pages describes a group or consolidated return; reporting runs by HMRC financial institution reference, each with a two-digit sub-reference, and by sub-return. The pages do not deal separately with UK branches of overseas banks, whose prudential reporting runs through the regime covered in our PRA Branch Return guide; for BBSI purposes, the notice and the regulation 5 test of money received or retained in the UK are the reference points. A third party can complete the return, but the guidance keeps the institution responsible for accuracy and timeliness, and paragraph 34(2)(b) of Schedule 23 accepts reliance on another person as a reasonable excuse only where the data-holder took reasonable care to avoid the failure.

What the report contains: BBSI spreadsheet columns and EFTF records

HMRC accepts two formats, its spreadsheet or an electronic flat text file, chosen for each sub-return; the guidance states that mixed formats are not acceptable. Both carry the institution, the account or instrument that paid interest, the reportable participants, and the gross interest paid and tax deducted for the tax year.

The HMRC spreadsheet: columns A to AE

The spreadsheet has 31 data columns, A to AE, the same range the help sheet embedded in the template validates. Grouped by role, the How to complete guidance sets these rules:

Two column details need particular care. A joint account’s gross interest appears in full against each reported holder, so every row for that account carries the account total. And column AA is called optional in the How to complete guidance, which says HMRC’s systems default an empty field to sterling (GBP), while the template’s own help text labels it mandatory. Populating it satisfies both readings, and the template’s validation flags GPB, GBR and GDP, three near-misses for GBP, as unacceptable.

The electronic flat text file: record types 1 to 4

Each EFTF batch is one text file made of four record types. Type 1 holds institution data and the metadata HMRC uses to parse the rest: the financial institution reference, name, branch name, sort code, tax year, a sterling return signal, and the declared character lengths and line counts for the variable fields in types 2 and 3. A branch-based filer can have several type 1 records in a batch.

Type 2 describes the account or instrument, with at least one per type 1 record. Type 3 describes the participants, with at least one per type 2 record or the return is failed. Type 4 closes the batch with an 11-digit count of its type 2 records.

Type 1 works as a contract for the rest of the file. If it declares four participant address lines of 20 characters, the matching type 3 records carry exactly that, and no type 2 or type 3 field may exceed 1,000 characters or five lines. Names and addresses can be structured in separate fields, which HMRC prefers, or unstructured in a single field, which is required for non-individuals. Unstructured entries carry a two-digit naming convention code. On type 3 records HMRC asks for 01 or 04 where possible and 07 for non-individuals, and says other codes will be phased out; on type 2 records, codes in the 20s cover separate surnames and codes in the 40s a shared surname, with 27 and 47 for non-individuals.

Currency, units and signs

The amount fields are where the choice of format changes the data:

In an EFTF, tax deducted is reported in the same currency as the interest, and a nil deduction is entered as 15 zeros. The spreadsheet requires gross interest above zero, so no negative amounts or zero-interest rows belong there; the EFTF field description states no equivalent rule. HMRC’s pages set no rounding convention beyond these formats.

Deadlines for the BBSI return: the 5 April year-end and the 30 June rule

The BBSI calendar comes from HMRC’s published cycle, with the notice as the governing document for any given year:

• 31 January each year: deadline to tell HMRC about additional sub-return numbers needed, or existing ones no longer needed.
• February: HMRC issues BBSI and OI notices as part of the normal cycle, and can also issue notices for previous tax years.
• 6 April to 5 April: the UK tax year the return covers.
• 30 June after the tax year ends: deadline for the return, unless the notice states otherwise.
• Two years after the period of the return: how long records used to make up the return must be kept.
• Four years after the end of a tax year: the latest point at which HMRC says a return for that year may be required.

The evergreen reading: the tax year ending on each 5 April is due on the following 30 June. HMRC’s worked table uses the 2023 to 2024 tax period, a 30 June 2024 deadline and notices in late February 2023, and says the process “follows the same annual cycle”. Because that table places the notice before the tax year it covers begins, I would take the period and due date from the notice itself and treat the table as HMRC’s default. The pages do not say when the BBSI return was first required; the notice power dates from the Finance Act 2011 and the relevant-data regulations from 1 April 2012.

The two record-keeping periods answer different questions. Records used to make up a return are kept for two years after its period (HMRC’s example: 2023 to 2024 records until 6 April 2026), and HMRC retains raw data for two years to resolve ingestion problems. Because a notice can reach back four years, the guidance also says records should be kept for that period; a 2019 to 2020 notice can be issued up to 5 April 2024.

Missing the deadline starts the Schedule 23 penalty sequence:

The £1,000-a-day figure quoted on HMRC’s template page is that tribunal ceiling; the opening penalty is £300. Paragraph 33 removes liability where the thing required was done within further time an officer allowed, and paragraph 34 removes it where HMRC, or the tribunal on appeal, accepts a reasonable excuse. Under paragraph 35, a paragraph 30 or 31 penalty must be assessed within 12 months of the latest of the date the liability arose, the end of the window for appealing the notice, and the determination or withdrawal of any such appeal.

Submission of the BBSI return: channels, labels, batches and resubmission

The notice specifies how and by when to submit. The How to complete guidance names email attachment and secure file transfer, and HMRC accepts no returns by post or courier. The secure route is the service renamed on 30 June 2026 from the Secure Data Exchange Service to “Transfer files securely with HMRC”; HMRC invites organisations to register, and the service page does not mention BBSI returns, so the notice is where to confirm the channel.

Large returns split two ways. A sub-return is a division the institution chooses, for example one per branch, with its own sub-return number. A batch splits a sub-return that holds too much data for one spreadsheet or text file; an EFTF sub-return over one gigabyte must be split, with up to one gigabyte per batch. If several sites each submit part of one sub-return, HMRC assumes the first file received is the complete sub-return, so the guidance asks for separate sub-return numbers per site or central collation.

Every file is labelled with the HMRC reference, the sub-return number, the batch number, the total number of batches for that reference, sub-return and year, and the year. Each file needs its own name, files should not be zipped together or in groups, and a mislabelled return can be rejected or queried. HMRC’s own example is a bank with reference A9876/03 submitting two batches for 2025:

EFTFs carry their own transport rules. Data must be encoded in UTF-8 as per ISO 20022, and HMRC’s April 2021 bulletin specifies UTF-8 with no byte order mark. Multibyte characters such as é count as single characters when fields are sized. Each record sits on its own line, ending in a line separator, which HMRC calls a terminated file; continuous files are no longer accepted.

Corrections and special cases follow set routes in the How to complete guidance:

• Omissions found after submission: tell HMRC immediately at da.enquiries@hmrc.gov.uk with the reference, submission number, year and details of the omission. HMRC says not to resubmit the complete return, which could capture data twice.
• An additional batch requested by HMRC: email tpi.c@hmrc.gov.uk confirming that it carries data omitted from an earlier submission, with a batch number that matches what is sent.
• A failed return: review it, correct the errors and resubmit.
• A nil return, possible where, for example, a product was withdrawn or newly introduced and no interest had been paid when the return falls due: tell HMRC by email at tpi.a@hmrc.gov.uk.

Official filing resources

None of these pages links a schema or taxonomy file for the BBSI return. The EFTF layout is defined field by field in the How to complete guidance, and the spreadsheet’s validation rules sit inside the template itself.

Validation of the BBSI return: built-in checks, HMRC’s data quality software and published rejection causes

Validation happens twice. In the spreadsheet, a column containing an error turns row 1 amber and shows the error count and the first row in error, updating as each is corrected; the template’s help sheet adds that row 2 turns amber, with a count, when required fields are left empty. HMRC says this validation cannot identify all potential errors. Its data quality software then checks the return against the prescribed format and fails it if it finds issues; a failed return is treated as outstanding, exposing the institution to a penalty charge, and HMRC asks the filer to review, correct and resubmit it.

The help sheet shows what HMRC screens for. Placeholder entries such as DITTO, NOT KNOWN, N/A and SEE ABOVE are flagged as unacceptable in the account number, name and address columns. Address lines are also flagged if they begin with “C/O”, contain “@” or read GONE AWAY, and postcodes must begin and end with a letter and contain a digit.

In January 2022 HMRC published its own list of the top five reasons it may reject a BBSI return:

Duplication can also cross returns. An institution required to make both a BBSI and an OI return must use the return that matches the interest type and report a customer’s interest on only one of them.

Accuracy carries its own penalty. Paragraph 32 imposes up to £3,000 where inaccurate data are provided and the inaccuracy was due to a failure to take reasonable care or was deliberate, was known when the data were provided and not disclosed to HMRC at that time, or was discovered later without reasonable steps to inform HMRC. The guidance asks institutions to inform HMRC immediately on discovering an error after submission, which may help minimise any penalty. A paragraph 32 penalty must be assessed within 12 months of the inaccuracy first coming to an officer’s attention and within six years of the liability arising.

Caveats for BBSI filers: representative capacity, client accounts, deceased customers and addresses

HMRC’s BBSI pages contain no proportionality regime, waiver or transitional relief. The flexibility they offer is procedural, through the nil return and the appeal grounds against a notice. The harder caveats concern who the participant is.

Representative capacity comes first. The legal owner of an account is normally the beneficial owner and is reported as an individual, but an account holder acting as a representative is categorised as a non-individual so the interest is not matched to their personal tax account. That covers trustees, charity trustees, office bearers of clubs or organisations, and personal representatives and executors. HMRC says the account name may help identify representative capacity, and it asks banks to strongly advise personal representatives to name the account so it is clear they represent another person. Interest paid directly to a trust beneficiary is reported against the beneficiary in the normal way.

All partnerships, whether ordinary, limited liability or limited, are reported the same way: the name of the account, with the partnership as participant. Client accounts split on designation. For a designated client account opened for one client, interest is reported as paid to that client where it is passed on and the bank holds the client’s details; for an undesignated, general client account, it is reported as paid to the firm. The guidance asks for account names that show which is which, and warns against confusing either with designated accounts that let an adult buy investments designated in a child’s name.

Deceased customers follow the payment date. If the account holder was alive when interest was paid or credited, they are reported. If they died before, the personal representative or executor is chargeable from the date of death and is reported as a non-individual, and the interest is not apportioned. On a joint account, if one holder dies before the payment date, the surviving holder is chargeable. Where the bank learns of a death late, it reports on the facts known when it makes the return.

Ownership changes during the year default to the year-end position: the holder or holders at the end of the tax year are reported as receiving all the interest, and a split before and after the change is accepted where systems can produce it. A British Forces Post Office address that is the only address held is reported, wherever that address is located. A “care of” address that is the only address held counts as residential if it clearly identifies a place, through a street name, an apartment or suite number or a clear rural route; it is reported if in the UK and left off if outside. Under HMRC’s October 2024 update, an account whose care-of address is too vague to place is reported until the customer confirms a residential address.

The spreadsheet’s column rules still bar “care of” addresses, and the template’s validation flags an address line beginning “C/O”. My reading is that a care-of address accepted as residential under the October 2024 guidance goes into columns M to Q without the care-of element; HMRC’s pages do not address the overlap directly.

Non-UK residents’ accounts are excluded from the BBSI return, and whether those accounts are reportable under another regime, such as the Common Reporting Standard, is a separate question. Our CRS reporting guide covers that standard at institution level from a Luxembourg starting point.

Changes to the BBSI return since HMRC’s 2021 guidance rewrite

HMRC’s current BBSI guidance pages were first published on GOV.UK on 2 December 2021, and its December 2021 bulletin announced updated guidance, step-by-step completion instructions and a newer spreadsheet template. Later changes appear in the update logs and bulletins:

HMRC’s BBSI changes surface through these update logs and, until January 2022, through bulletins; the collection holds no later bulletin. Denmark’s Skattestyrelsen, by contrast, publishes an annual letter of changes for its interest and securities reports, covered in our Skat Årsbrev 2026 explainer.

A wider reform sits in separate legislation. Schedule 23 to the Finance Act 2026, which received Royal Assent on 18 March 2026, lets the Treasury make regulations requiring relevant data-holders, as defined in Part 2 of the 2011 Schedule, to provide data to HMRC on an ongoing basis and to make reasonable efforts to obtain identifiers such as National Insurance numbers. HMRC published draft Data-gathering (Ongoing Data) Regulations 2026 for technical consultation from 20 July to 20 August 2026. As drafted, they come into force on 6 April 2028 and apply to specified financial institutions including banks and building societies, and HMRC’s consultation page says in-scope data-holders will then provide data on an ongoing basis without a notice from HMRC. HMRC’s BBSI pages do not mention this reform and announce no new template version.

One adjacent HMRC change has a fixed date: the International Exchange of Information Manual says that from 1 January 2027 CRS and FATCA reporting will need to be done separately, with HMRC’s combined CRS/FATCA schema no longer in use after 31 December 2026. That change concerns XML submissions for automatic exchange of information, and the BBSI guidance does not refer to it.

Frequently Asked Questions

A customer moved abroad during the tax year. Does their interest go on the BBSI return?

That depends on the address basis the system uses. HMRC’s general rule is the address held on 5 April of the year being returned, so a customer living abroad by then drops out; HMRC also accepts reports built on the information held when interest was paid or credited, where the system is set up that way. A closed account is included if the investor had a UK address on the closure date. On either basis, the institution must be able to show HMRC why each payment was included or excluded.

An account was charged negative interest for part of the year and earned positive interest for the rest. What is reported?

The full positive interest. HMRC’s guidance says negative interest does not meet the definition of interest, is comparable to a fee for holding the customer’s money, and cannot offset interest paid. Its example: £300 of interest paid in a year with £100 of negative interest is reported as £300.

We found that an ISA was invalid after the return went in. Do we send a corrected return?

The guidance says no further return is sent; the institution keeps the details in case HMRC requests them, and the same applies to an ISA repaired after filing. If either is found before the return goes in, the return shows the correct position: interest on an invalid ISA is reported, and interest on a repaired ISA up to the date of repair.

Can some foreign currency accounts be converted to sterling and others left in their own currency?

HMRC allows foreign currency interest to be reported in that currency or in sterling, but requires a consistent format throughout the report, and the conversion flag is a return-level entry: spreadsheet column AB is completed once, in row 3, and the EFTF sterling return signal sits in the type 1 record. Column AA, or the EFTF currency identifier, still carries the original currency’s ISO code.

A joint account has one UK-resident holder and one holder living abroad. How is it reported?

A joint account is reportable if any holder is a reportable person, and HMRC asks for the names of all reportable joint holders, or as many as practical. Column J counts every participant, reportable or not, and column L only those reported, so this account shows 2 in J and 1 in L, and the UK holder’s row carries the account’s full gross interest.

Can one branch file its sub-return as a spreadsheet and another as an EFTF?

The guidance lets the format be chosen for each sub-return and says mixed formats are not acceptable. My reading is that the bar applies within a sub-return, so two branches on separate sub-return numbers could use different formats. The guidance does not say so in terms, and HMRC’s sub-return mailbox, da.enquiries@hmrc.gov.uk, is the place to confirm it.

A solicitor’s client account earns interest that we suspect never reaches the client. Is it still reported?

Yes. HMRC’s guidance says the interest is included even where the bank suspects it was not passed on, and HMRC will make enquiries directly with the customer if necessary. Whether it is reported against the client or the firm depends on whether the account is designated for a specific client.

A customer has reclaimed money from an account moved to a dormant-account reclaim fund years ago. Which tax year does the interest belong to?

The year the owner comes forward. HMRC’s guidance says interest is not reported when a dormant balance moves to a reclaim fund, only when the owner reclaims it, and then as the total interest accrued but unreported while unclaimed. Regulation 7 of SI 2012/847 reaches the same result: interest on a relevant dormant account becomes relevant data when the repayment claim is settled and is treated as paid at that time.

Related Articles

• Skat Årsbrev 2026: TIN Rules, OBLG Entry Tests and Key Dates: the annual letter in which Denmark’s tax agency announces changes to eKapital interest and securities reports.
• PRA Branch Return: Half-Yearly Reporting for UK Bank Branches: the PRA’s half-yearly return for UK branches of non-UK banks, collected through BEEDS.
• CRS Reporting in Luxembourg: Practical Guide for Financial Institutions: how the Common Reporting Standard works for reporting financial institutions.
• FATCA Reporting in Luxembourg: Practical Guide for Financial Institutions: the US account-reporting regime as it applies to financial institutions.

Key Takeaways

• Diary 31 January as the first BBSI action date of each cycle: sub-return number changes reach HMRC before the notice does.
• Take the period, deadline and channel from each year’s notice; under paragraph 4 of Schedule 23 its terms are the binding ones.
• Download the spreadsheet from the GOV.UK templates page for each cycle and paste values only; HMRC accepts no reformatted versions and warns that copying onto a blank workbook can affect processing.
• Convert amounts when moving between formats: 100.00 in the spreadsheet becomes 10000, in pence, in a sterling EFTF.
• Fix categorisation before formatting: miscategorised representative-capacity accounts are first on HMRC’s list of five rejection reasons and produce wrong personal tax charges.
• Report an omission found after filing by email with the reference, submission number and year; resubmitting the whole return risks double capture.
• Retain source data for the four-year notice window HMRC’s guidance recommends; the two-year rule covers only the records used to make up a return.

Sources and References

• HMRC, Bank and building society interest returns (guidance, last updated 25 October 2024): gov.uk/guidance/bank-and-building-society-interest-returns
• HMRC, How to complete a bank and building society interest return (guidance, last updated 3 August 2026): gov.uk/guidance/how-to-complete-a-bank-and-building-society-interest-return
• HMRC, HMRC spreadsheet templates for Bank and Building Society Interest returns and Other Interest returns (last updated 19 February 2024): gov.uk publication page
• HMRC, HMRC spreadsheet for Bank and Building Society Interest returns (xlsx): assets.publishing.service.gov.uk
• HMRC, Bank and Building Society Interest and Other Interest returns (collection): gov.uk collection page
• HMRC, Bank and Building Society Interest returns: Bulletin January 2022 (26 January 2022): gov.uk bulletin
• HMRC, Bank and Building Society Interest returns: Bulletin December 2021 (14 December 2021): gov.uk bulletin
• HMRC, Bank and Building Society Interest returns: Bulletin April 2021: gov.uk bulletin
• HMRC, Transfer files securely with HMRC (last updated 2 September 2026): gov.uk/guidance/transfer-files-securely-with-hmrc
• Finance Act 2011, Schedule 23 (Data-gathering powers), revised text: legislation.gov.uk/ukpga/2011/11/schedule/23
• The Data-gathering Powers (Relevant Data) Regulations 2012 (SI 2012/847), as amended: legislation.gov.uk/uksi/2012/847
• Finance Act 2026, Schedule 23 (Data-gathering): legislation.gov.uk/ukpga/2026/11/schedule/23
• HMRC, Draft legislation: Better use of new and improved third-party data (technical consultation, 20 July to 20 August 2026): gov.uk consultation page
• HMRC, International Exchange of Information Manual, IEIM404500 (Reporting Format): gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim404500

Preparing for the Next BBSI Notice

The cycle’s first fixed point falls before HMRC’s February notice arrives. By 31 January, the sub-return numbers HMRC holds need to match the branch and site structure that will produce the file, and the representative-capacity and address rules need to be in the extract before the tax year closes on 5 April. The return then falls due on 30 June, or on the date the notice sets.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.