Common misreporting errors: RMAR

Find out more about common errors that firms make when submitting their returns. 

Intangible assets

Firms that report an intangible assets figure box 1 RMA-A should remember to deduct this amount when calculating their total capital resources box 30 or 36 RMA-D. Intangible assets are not physical in nature. Examples include copyrights, patents, intellectual property and goodwill. As these cannot be realised instantaneously therefore, they cannot be included as part of a firm’s capital resource.

Recoverable and readily realisable debtors

Monies owed to the firm must be recoverable and readily realisable. If a firm has reason to doubt that a debt may not be repaid in full or not paid at all, or that it will take a significant time to recover, then these should be excluded.

Liabilities due within one year

Liabilities are debts owed by a firm that are due for settlement within 12 months. In RMA-A, although the heading refers to ‘one year’, firms should reflect their liabilities for the 6-month period according to the reporting period information at the top of the form. It should be remembered that after one year such liabilities become ‘other liabilities falling due after more than one year, ie box 16 RMA-A.

Material post-balance sheet events

Material events can occur during reporting periods, therefore, when a firm is aware of a material change to its capital excess it should immediately notify the FCA. This could be due to an adverse assessment of its assets after it had reported, or where dividend payments are substantially higher than envisaged at the time of reporting.

Profit and loss (P&L) completed non-cumulatively

A number of firms have been completing their P&L with the information relating to that reporting period only. The P&L should be reported on a cumulative basis throughout the firm’s financial year. This means that the P&L for the year-end return must include the full 12-months profit and loss information for the firm for that year.

Cumulative profit figures

A firm can choose to include unaudited interim profits in its returns but these must not be double counted in the full year submission, eg included twice. This gives a misleading impression of the firm’s finances.

Corporation tax

Taxation should be based on an estimate of the likely effective tax rate for the year applied to the profit or loss arising. This is true at both the 6-month submission and full year return.

Commission clawback

Insurers are required to provide us with details of individual clawback amounts paid to intermediaries. This in turn should be reported by the intermediary as part of their return as a liability.

Client money and assets

RMA-C is greyed out for firms that do not have the permission to hold client money but are still required to answer the question ‘does the firm hold any client assets (other than client money)’ in box 10. Firms that hold client assets must firstly have the permission to hold client money.

Base, capital and own funds requirements

The relevant columns headed ‘client money’ and ‘non-client money’ is greyed out according to a firm’s client money permission, and firms should enter their correct base and/or own funds requirement in boxes 2 and/or 16 of the RMA-D1 respectively. In addition to the base requirement, a firm should also enter its additional capital requirements for PII or any other applicable FSA capital requirements in boxes 6/7 and/or 13/14 of the RMA-D.

Cash equals capital requirement

Too often firms believe that an amount in a bank account equivalent to its base requirement means that it meets its capital resources requirement. This is not the case. A firm must declare its accurate total capital resource which should be made up of eligible capital as set out in MIPRU 4.4.2R or IPRU-INV Chapter 13 (for category B firms) and ensure it has sufficient eligible capital resource to meet its requirement.

Capital Adequacy assessed twice yearly

Firms only measure their capital adequacy when required to do so by us in their returns. A firm must be able to demonstrate that its own funds were equal to or greater than its own funds requirements throughout the reporting period.

Subordinated loans

Firms wrongly classify a loan as subordinated when there is no contractual agreement in force. Any early repayment of an eligible loan must be with our agreement.

Personal assets

Sole traders or partnership firms that have the permission to hold client money are not allowed to use personal assets as part of their capital resource as set out in MIPRU 4.4.5R.

For those sole traders or partnerships that do not hold client money permissions, they can only use their personal assets provided those assets are not being used for any other business activities.

Correct PII reporting footing

Firms are required to answer questions 1 to 3 in RMA-E on every return and should provide their full PII details in the reporting period where renewal or amendment of a policy occurs.

Limit of indemnity

A firm with a limit of indemnity described as ‘any one claim’ or ‘each and every claim’ in its PII is recognised as having an unlimited aggregate cover. Therefore it should report ‘Unlimited’ aggregate indemnity cover in box O RMA-E when reporting details of its PII policy.

Retroactive start date

A retroactive start date is a date before which an insurer will not provide cover. Our rules require authorised firms to have continuous cover from the date of their authorisation. If a firm’s PII policy has a retroactive start date then it should enter this date in box 4D of the RMA-E otherwise, this box should be left blank.

A retroactive start date is not the same as the policy start date.

Multiple PII

Some firms opt to have multiple PII policy that covers their mortgage and non-investment insurance or retail investment activities separately. In this instance, we require firms to declare all their PII covers and enter their limit specifications for each relevant activity.


A firm is required to notify the FCA of its change in controllers, regardless of whether it is an increase or a decrease.

Competent advisers

A firm that has the advising permission must ensure it has competent advisers regardless of whether it gives advice or not.

Number of Appointed Representatives (ARs)

Firms are reminded to declare the number of their Appointed Representatives as at the reporting period end and only reflect the change if the withdrawal or addition has been granted on or before the reporting period end-date.

Data entered in wrong units in data items FSA001 to FSA046

Firms submitting the data items from FSA001 to FSA046 need to submit the financial data in thousands. Some firms have been submitting in single units in error. For example, if your firm has £200,000 fixed assets, then '200' must be entered for fixed assets.