Money Covered: The Week That Was – 20 March 2026

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

The fifth episode of Season 4 of our podcast, Money Covered – The Month That Was, where the team looks at the Financial Conduct Authority's Vehicle Finance Redress Scheme Consultation, is now available.

To listen to this and all previous episodes, please click here.

Headline development

Government confirms changes to FOS operations following review

The government has set out a package of reforms aimed at returning the Financial Ombudsman Service (FOS) to its original role as a fast, impartial complaints body.

Changes will include legislation to:

• Adapt FOS' fair and reasonable test - where a firm has complied with its obligations under the relevant FCA rules, the FOS must find that the firm acted fairly and reasonably.
• Introduce a referral mechanism to the FCA where there is ambiguity in what the FCA's rules require, or where there may be wider market implications across the financial services industry.
• Introduce a 10-year longstop for complaints to the FOS, subject to limited exceptions, such as for long term products such as pensions. The FOS will also be able to decline particularly complex cases that are better suited to the courts or other routes.
• Implement structural changes to provide greater consistency across decisions through giving the Chief Ombudsman overall responsibility for FOS determinations.
• Make it easier for firms and consumers to understand and learn from FOS decisions through requiring FOS and the FCA to produce joint thematic reports to improve transparency around how certain types of complaint are handled.
• Ensure the FCA has the tools to respond to mass redress events in the small number of cases where intervention is necessary.

To read more, please click here.

Accountants

Consultation launched on expanding HMRC’s Uncertain Tax Treatment rules

The Uncertain Tax Treatment (UTT) regime was introduced in 2022 and is designed to narrow the tax gap arising from differing interpretations of tax law between companies or partnerships and HMRC.

Under the UTT regime, large businesses must notify HMRC when such differences in interpretation exist. The UTT currently applies only to companies or partnerships that meet specific reporting and financial criteria, including thresholds for turnover and balance sheet totals. The regime does not currently apply to individuals or trusts.

On 12 March 2026, the government published a consultation setting out proposed changes to the UTT regime, including extending it to individuals and trusts, introducing an additional trigger and bringing more taxes within its scope. The consultation closes on 4 June 2026, with the government intending to publish its response in the summer and include any legislation in the next available Finance Bill. The changes would apply to returns filed after 1 April the following year.

To read more, please click here.

To read the consultation, please click here.

ICAEW updates engagement letter templates

The ICAEW has published updated engagement letter templates with new schedules added to reflect recent regulatory, operational and technological developments.

The changes include dedicated schedules covering:

• Identity Verification (IDV) – Firms acting as Authorised Corporate Service Providers and which offer IDV services will now need tailored engagement terms which articulate the scope of IDV services, responsibilities of the client and firm and fees and limitation.
• Filing company accounts on behalf of clients – the updated schedules require clear allocation of responsibility for obtaining verification codes, definition of the firm's role in submitting filings and clarity on the reliance placed on client-provided information.
• Making Tax Digital – the updated schedule help firms set out which services they provide, what digital records the client must keep, and any reliance on third party software or agents.
• Schedules for agreed upon procedures – firms providing agreed-upon procedures will need to define responsibilities and applicable standards and confirm the engagement provides no assurance or opinion, specify exactly which procedures will be performed and note reliance on management-provided information, and limit use by restricting how the report may be used or shared and confirm that the firm has no responsibility to third parties.
• The use of AI – the Terms of Business have been updated to refer to the use of AI, and new guidance surrounding the terms of use of AI.

The ICAEW publication also contains some helpful reminders for when firms take on new clients, and what will need to be considered for current clients. The publication further provides guidance on common pitfalls with engagement letters and provides guidance on disengaging clients.

To read the ICAEW publication, please click here.

HMRC Updates Guidance on Payment of CGT by Trusts

UK resident taxpayers, including trusts, must report disposals of UK residential property and land to HMRC within 60 days where capital gains tax (CGT) is payable. A report made on behalf of a trust must include its unique taxpayer reference (UTR) or unique reference number (URN).

Under updated HMRC guidance, if the trust does not have a UTR or URN, it must be registered with HMRC’s Trust Registration Service before it can create a CGT on UK property account or submit a paper return, even if the trust would normally be exempt from registration.

The 60-day deadline applies both to reporting the disposal and paying any CGT due. If, after filing the self-assessment (SA) tax return for the year of disposal it transpires that too much CGT was paid under the 60-day rules, HMRC will first set the overpayment against any SA tax still outstanding. Any remaining CGT overpayment is not refunded automatically: the taxpayer must contact HMRC directly to claim the balance.

To read more, please click here.

Auditors

FRC issues new Interim Guidance on Payment and E-Money Safeguarding and Assurance Engagements

In advance of the FCA's new Supplementary Regime (the Regime) which comes into force on 7 May 2026, the FRC has published new Interim Guidance on Payment and E-Money Safeguarding Assurance Engagements (the Guidance), providing support for safeguarding auditors.

The Regime introduces enhanced requirements for reconciliations, recordkeeping and governance to addresses weaknesses in current safeguarding arrangements and to strengthen consumer protection.

The Guidance, which the FRC emphasises is non-mandatory and is not a performance standard, sets out principles in support of high quality, consistent safeguarding assurance engagements to bridge the gap between implementation of the Regime until 2027, which is when the FRC is expected to issue a dedicated safeguarding assurance standard following a public consultation.

The FRC also states that the Guidance does not create new requirements and it does not replace or override the Electronic Money Regulations, Payment Services Regulations or CASS 15.

To read the Interim Guidance, please click here.

Regulatory developments for FCA regulated entities

FCA publishes Regulatory Priorities report for retail banking sector

The FCA has published its Regulatory Priorities report for the retail banking sector. Its four priorities for the next 12 months are:

1. Access to cash and essential banking services – the FCA observes that many consumers now bank digitally and many banks are "undertaking digital-first transformations". The FCA stresses that digital transformations must avoid causing foreseeable harm to retail customers, and that any alternative service firms propose should be accessible to customers before branches close. The FCA notes this is closely monitored, and it will intervene where it needs to.

2. Good outcomes from products and services – the FCA calls on firms to continue driving positive outcomes under the Consumer Duty and develop their data for monitoring retail customer outcomes to identify where further action is needed to support customers and avoid causing foreseeable harm. 

3. Fighting fraud and other financial crime – the FCA notes that threats are evolving rapidly and firms must continuously refine their defence to fraud, money laundering and other risks. Firms must help customers understand fraud risks and support victims.

4. Operational resilience and data security – the FCA requires firms to identify emerging risks and critical third-party dependencies. The regulator expects firms to improve their cyber and information protection strategies with tested recovery plans. 

To read more, please click here. 

FCA publish its 2026/2027 regulatory priorities for consumer finance

On 17 March 2026, the FCA published its annual report on regulatory priorities for consumer finance. The three key priorities for the upcoming financial year are: 

1. Consumers accessing credit that meets their needs – this includes firms lending responsibly with adequate support, suitability assessments, and fair value.

2. Firms supporting consumers who struggle with debt – debt advice should be clear and concise, and provided in a timely matter to avoid escalation and to ensure good outcomes. Emphasis has been placed on the importance of those struggling with debt being able to get the support they need – including advice from both firms and institutions.

3. Consumers being able to complain when things go wrong and get appropriate redress – firms are expected to properly identify issues and deal with complaints so that they can provide fair value to customers. Whilst this is a requirement across financial services, the clear focus this financial year will be on motor finance firms cooperating with the FCA as the compensation scheme for vehicle finance arrangements goes live later this year.  

The three priorities outlined by the FCA are heightened in circumstances where credit lending has increased by 8% in 2025, the emerging risk/benefit of AI and in an economy where people are struggling with the cost of living. The priorities indicate that the FCA recognise that increased use of consumer credit leads to an increased risk of unsuitable advice, loss and redress claims. 

To read more, please click here.

FCA sets out Regulatory Priorities for the UK Mortgage Market

On 12 March 2026, the FCA published its Regulatory Priorities report for the mortgages sector aimed at mortgage and home finances lenders, administrators, and intermediaries.

The report outlines the regulator’s supervisory focus for the UK mortgage market and signals a shift toward a more flexible, yet consumer-focused, framework. A central initiative is the Mortgage Rule Review, which seeks to modernise existing rules by simplifying requirements around affordability assessments, advice, and product switching while preserving safeguards against unsustainable lending. 

The FCA emphasises that firms must continue to deliver good consumer outcomes under the Consumer Duty, particularly when supporting borrowers experiencing payment difficulty. Lenders and intermediaries are expected to identify vulnerable customers early and provide appropriate forbearance and tailored assistance. The report also highlights concerns about advice quality and suitability of recommendations. 

To read the full report click here.

FCA publishes findings following a review of the second charge mortgage market

On 12 March 2026, the FCA published its findings following a review of mortgage advice, fees and charges and affordability assessments conducted by second charge lenders.

Overall, there is evidence of good practice amongst lenders and intermediaries, particularly in relation to the Consumer Duty requirements. The FCA found clear evidence of discussions and innovative use of technology aimed at improving customer outcomes. The areas where some firms could improve relate to: 

• The standard of advice given in relation to debt consolidation. The focus should be on consumers' genuine needs and circumstances, not just eligibility.
• More robust affordability assessments which focus on realistic customer expenditure.
• How intermediaries and lenders work together to deliver good customer outcomes. Some intermediaries did not always pass on all relevant customer information to lenders, which then led to inaccurate or unfair assessments by lenders.
• More complete record keeping. Incomplete record keeping made it hard for the FCA to assess the suitability of advice or the basis of some lending decisions.
• The level of fees charged by intermediaries. They are often higher than for first charge holders and there was very little evidence to justify the higher fees. 

Consumers are often using second charge mortgages to consolidate debt, meaning they are at a greater risk of suffering harm due to vulnerability, level of debt and low financial resilience. The Consumer Duty is paramount in ensuring that these vulnerable customers are receiving fair and accurate advice which provides for good outcomes. 

The FCA is continuing to work with firms to improve the second charge market and will monitor firms where concerns have been noted. 

To read more, please click here.

APPG calls for overhaul of UK financial regulation

The All-Party Parliamentary Group (APPG) on Investment Fraud & Fairer Financial Services released a 250-page report this week, calling for extensive reform of financial regulation in the UK.  The report calls for a Royal Commission to examine wide-ranging reforms for the FCA, similar to what has already been done in Australia.

The report is particularly critical of the government's current efforts to reduce regulation to promote economic growth, concluding that this policy will simply weaken protections for the public in a time when protections for the public are already inadequate.  This latest report echoes a 2024 report from the same group, which was highly critical of the FCA.

There have been mixed responses to the report, with a consumer group accusing the report of being unbalanced and merely a rehash of the 2024 report.  The FCA, in response, pointed to its recent improvements and increased rates of criminal prosecution.  

To read more, click here.

To read the APPG's press release, click here.

FCA announces changes to incident and third-party reporting

Following consultation in December 2024, the FCA has confirmed rule changes regarding reporting disruptions, such as cyber-attacks and power outages.  The rules are aimed at providing more clarity to firms about what to report and when, and how to deal with third-party outages which might cause major disruptions across sectors.  

The FCA states that it has:

• Created a simple, streamlined reporting regime with the Prudential Regulation Authority (PRA) and Bank of England, including a single reporting portal.
• Removed duplicative incident reporting for payment service providers and credit rating agencies.
• Refined the overall information required, allowing most of the firms the FCA solo regulates to complete a short form to tell them about their incident.
• Added clearer guidance on thresholds, definitions and responsibilities.

The FCA has also provided guidance giving firms examples of what to report, guidelines on the thresholds for reporting, and assistance in completing reporting forms.  The new rules are set to come into force in March 2027, giving firms 12 months to prepare. The FCA is hosting a webinar on 29 April 2026 on the new rules to help firms with the transition.

To read more, including links to the rules, guidance, and the webinar, please click here.

FCA says firms not proactive enough in identifying vulnerable customers

Firms will be aware that, as part of the Consumer Duty, they are required to identify vulnerable customers and ensure they are treated fairly.  In a recent review, the FCA has noted that firms are taking too reactive an approach when it comes to identifying vulnerable customers.

Rather than relying on customers to self-identify as vulnerable or for staff to spot flags for vulnerability, the FCA says that firms need to adopt a more proactive approach.  For example, firms can embed "structural vulnerability assessments at key decision points such as onboarding, renewal, and arrears" and ensure that all communications are tailored to maximise accessibility for all, rather than waiting to tailor communications for a specific customer after vulnerability has been identified.

The FCA noted other areas for improvement, such as ensuring that promotions highlight risks as much as the benefits and carrying out real customer testing to ensure their communications are clear and easily understood.  

To read the FCA's review, please click here.

FCA issues guidance on good and poor practice on identifying and rectifying harm

The FCA has issued a Finalised Guidance paper setting out its expectations of firms on identifying harm and rectifying it through redress exercises (a requirement under the Consumer Duty).

The guidance paper notes that a redress exercise is likely to require a firm to:

• Consider its previous conduct.
• Decide if it owes remedial action to customers; and
• If so, provide affected customers with the necessary remedy without the customer having to raise a complaint. 

The FCA identified the following as good practice for the key stages of a redress exercise:

1. Proactively identifying harm – good practice includes having a central complaints forum to discuss trends and cases from across their business and using external help.

2. Designing a redress exercise – good practice examples involved ensuring the firm had captured all customers impacted by its error. Poor practice included deciding on an opt-in process without considering the information needs of customers, with one firm having decided to only send 1 letter to customers and failing to use multiple means of communication.

3. Designing a communication plan – good practice includes setting key dates for contacting customers and contact method, setting deadlines for customers to provide further information, draft templates for communicating with customers, and informing frontline staff about the redress exercise.

4. Communicating with customers – good practice includes explaining information in a logical way, using plain language, and giving adequate time for customers to respond. The guidance also notes that deciding on an opt out approach may be appropriate where there are vulnerable customers that are less likely to engage with the redress exercise. The guidance also notes that good practice would include testing communications internally or with a third-party consultant before communicating with customers. 

5. Record keeping – good practice includes monitoring the performance of the redress exercise. This may involve recording how many customers have been contacted and how many had responded, as well as recording redress awards to determine whether the exercise had achieved good customer outcomes. 

To read the Finalised Guidance paper please click here. 

Relevant case updates

High Court refuses dismissal for CPR 7.7 non-compliance

In Global Fintech Investments Holding AG v Linklaters LLP [2025] EWHC 2969, the High Court refused an application to dismiss a claim under CPR 7.7(3), despite non-compliance with a CPR 7.7(1) notice, which required service of the claim form or discontinuance.

The claim form was issued by the Claimant the day before limitation expired but did not serve the claim form until the final day of its validity period. Prior to service of the claim form, the defendant became aware of the claim through the legal press and served a CPR 7.7 notice, requiring service of the claim form or discontinuance. In response, the Claimant said investigations were ongoing, and that it was not in a position to serve, leading to the Defendant issuing the application under CPR 7.7(3).

The judge held that compliance with a CPR 7.7 notice isn’t mandatory and that non-compliance instead triggers the court’s discretion. In the judge's view, there was there was no presumption in support of or against the argument that the claim should be dismissed. Instead, the judge held that the court can make whatever order is just, taking into account all the circumstances and the overriding objective.

The judge also made clear that CPR 7.7 is not a workaround for striking out weak claims and that if a Defendant wants to challenge the merits, the proper route is an application for strike out, pursuant to CPR 3.4.

The judge also held that:

• Non-compliance with a CPR 7.7 notice is a precondition to the exercise of discretion - it is not a factor that weighs for or against dismissal.
• Prejudice is not a ground to justify dismissal of the claim.

To read the judgment, please click here.

Court of Appeal rejects limitation arguments following a rectified issue fee error

The Court of Appeal (CofA) in Hassan-Soudey (aka Hamilton) and others v Siniakovich 2026 EWCA Civ 215 has held that, for the purposes of limitation, a claim is brought when the claim form is first delivered to the court office, even if the appropriate fee has not been paid in full and the court office legitimately refuse to issue it.

The Claimant's solicitor sought to issue defamation and malicious falsehood proceedings the day before the limitation period expired. An issue fee of £10,000 was paid based on the monetary claim stated on the claim form, however the particulars of claim also sought an injunction which would have required an additional issue fee of £626. The court office (after the date for limitation had passed) rejected the filings due to the underpayment of the issue fee. 

The Claimant's solicitor issued a relief from sanctions application, requesting that the court treat the claim as issued on the first date it was filed. The application was granted in the first instance and then formed the subject of the Defendant's appeal. 

The CofA held that the court had no jurisdiction to change the date when an action was brought or backdate the date of issue. The court emphasised that bringing the action was reliant on the Claimant's conduct and not the court's administrative processes. The reasons for payment error were not relevant for the purposes of issuing a claim and if the Claimant's conduct was deliberate or dishonest, other sanctions, such as strike out were available. It was not therefore appropriate or proportionate to not allow the case to carry on, particularly where the issue of underpayment had been swiftly rectified.  

This case stands as a reminder to both Claimants and Defendants that where the particulars of claim are filed with the claim form and are intended to be read together, the issue fee must be calculated based on the relief claimed in both documents. 

To read the judgment, please click here.

High Court declares first ‘statutory SLAPP’ in libel claim

The High Court has made a novel ruling declaring a libel and malicious falsehood claim to be a statutory strategic litigation against public participation (SLAPP) under section 195 of the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023). This is the first time the High Court has had to consider whether a claim amounts to a SLAPP under the new statutory regime. 

The Claimant was a tax barrister who brought proceedings against Tax Policy Associates Ltd and Daniel Neidle (the Defendant) following the publication of an article criticising tax avoidance schemes and the barrister's conduct. The Defendant's opinions in the article were supported by the public record court proceedings, regulatory positions and the claimant's own public statements. The High Court granted summary judgment having agreed with the Defendant's honest opinion defence under section 3 of the Defamation Act 2013. 
  
The High Court found the claim to be a SLAPP having decided that the Defendant's article concerned economic crime for the purposes of s.195 of the ECCTA – it raised concern that the Claimant had cheated the public revenue, and its publication was intended to combat economic crime. The High Court found the claimant had intended to cause harassment beyond that ordinarily encountered in properly conducted litigation.
 
To read more please click here.

With thanks to this week's contributors: James Parsons, Alison Thomas, Daniel Goh, Heather Buttifant, Ben Simmonds, Kerone Thomas, Rebekah Bayliss