The UK Government has issued updated guidance to help banks and building societies comply with their immigration-related obligations.
The UK Government has issued updated guidance to help banks and building societies (collectively referred to as ‘firms’) comply with their immigration-related obligations.
Firms are prohibited from opening or operating current accounts for individuals disqualified due to their immigration status. To meet this obligation, firms must verify customer details against Home Office data on known unlawful individuals.
Who Is a Disqualified Person?
An individual is considered disqualified from opening or operating a UK current account if they meet all of the following criteria:
- they are physically present in the UK;
- they require immigration permission to remain the UK, but do not hold it; and
- the Secretary of State has determined they should be disqualified from opening or operating a current account.
How Should Firms Carry Out Checks?
To comply with the legislation, firms must screen both new and existing account holders against Home Office data on disqualified individuals. This process applies not only to account holders but also to signatories and beneficiaries.
In addition to initial checks, firms are required to conduct regular reviews, at least one per quarter, on all existing accounts, following HM Treasury regulations. Consistent and thorough screening ensures that only those legally permitted can operate a UK current account.
Current Account Applications
Firms must ensure they do not open a current account for anyone deemed disqualified. This requirement applies to all applications – whether for a new account or to add someone as a joint holder, signatory, or beneficiary of an existing account. Therefore, every adult applicant (aged 18 or over) must be screened against Home Office data to confirm eligibility.
The prohibition applies only to consumers, defined as:
- individuals acting for purposes other than trade, business, or profession;
- charities with an annual income under £1 million per annum; and
- micro enterprises (which include the self-employed or businesses with fewer than ten employees and an annual turnover or balance sheet not exceeding €2 million).
Matching Criteria
A person is considered “matched” if there is at least a three-point match against the Home Office data on disqualified persons.
If a positive match occurs, the firm must refuse to open the account. For joint applications, the firm must refuse the joint account but may open a sole account for the non-disqualified person.
Ongoing Checks for Existing Accounts
Firms must periodically review existing current accounts to identify any held by disqualified persons. This involves checking accounts against the Home Office data.
If a match is found, the firm must report the account the account to the Home Office. Firms may also share any other relevant information to assist the Home Office in restricting access for disqualified individuals.
Where a disqualified person acts under a Power of Attorney, firms must report the match but not close the account of the actual account holder is not disqualified. Instead, access for the disqualified person should be restricted.
Excluded Accounts
Firms must carry out immigration checks on all current accounts – except those defined as excluded by HM Treasury Regulations. Excluded accounts are those operated for the purposes of trade, businesses, or profession.
Home Office Response
Once a match is reported, the Home Office conducts a secondary verification and issues instructions via a secure portal.
Possible responses may include:
- that the bank should take ‘No Further Action’ on the match;
- that no further action is required until or unless further instructions follow from the Home Office; or
- a notification that the duty to close accounts applies.
Reporting Regular Payments
Firms are required to report accounts showing regular payments – defined as two or more transactions of £200+ from the same source within the past 12 months. These payments can be domestic or international and may include transfers from the disqualified person themselves.
Freezing Orders
The Home Office may seek a freezing order where necessary, guided by its published Code of Practice. If granted, firms must block withdrawals and payments until the order is lifted.
Orders may allow:
- reasonable living or legal expenses for the disqualified person; and
- withdrawals by non-disqualified individuals.
Account Closure Duties
When instructed via the Home Office portal, firms must close the account promptly. Immigration appeals do not affect this duty.
Key requirements:
- firms must return credit balances to the account holder in line with terms and conditions, unless the account is under investigation or subject to law enforcement action;
- firms must only delay closure if necessary to manage debts or protect third-party interests; and
- firms may only restrict access instead of closing an account where appropriate, such as joint accounts of accounts with non-disqualified signatories
Customer Communication
Firms must inform customers of the closure or access restriction where lawful, using Home Office approved wording. Immigration status must not be disclosed to third parties; communications should reference compliance with legislative or regulatory requirements.
We offer a range of services designed to support firms with legislative change in the immigration sphere. Please contact us at [email protected] for more information.
Article contributor, Georgina Walker, Graduate Apprentice Solicitor
