UK Finance has responded to His Majesty's Revenue and Customs (HMRC's) consultation on simplifying the process for obtaining treaty relief from withholding tax on interest paid overseas.

Members support proportionate simplification of the process for obtaining treaty relief on overseas interest payments. They favour a hybrid approach: self-assessment should be available for clearly defined, low-risk cases, while an optional advance-clearance facility should remain available for complex, high-value, or novel arrangements. Any reform must preserve certainty and avoid replacing existing administrative steps with an expanded compliance and evidential burden for UK payers.

Members also encourage HMRC to simplify the existing Double Taxation Treaty Passport (DTTP) scheme regardless of any move toward self-assessment.

UK Finance highlight that any future framework must recognise the distinct operational realities and commercial value of treaty relief mechanisms across intercompany funding versus institutional third-party lending.

Members therefore urge HMRC to cater explicitly to the specific friction points of institutional third-party lending, ensuring that proposed reforms do not assume a one-size-fits-all model.