HMRC has published a research report DAC
6: disclosure of cross-border arrangements on the role of intermediaries
in cross-border tax arrangements. DAC 6 requires intermediaries to report
details of certain types of cross-border tax arrangements to tax authorities.
The research aimed to deepen HMRC’s understanding of:
the profile of
the UK intermediary population (accountants, tax advisers, banks, lawyers and
wealth managers) in the context of cross-border arrangements;
the possible
impact of the new regulations on tax planning and avoidance-related activity,
particularly among high net worth individuals and multinational corporates; and
the potential
impact of the new regulations on the intermediary population and the level of
awareness of the new regulations.
According to the report, intermediaries’ awareness of DAC 6 was
generally low, and a large proportion of lawyers (59%), accountants and tax
advisers (47%) and wealth managers (43%) had not heard of the regulations at
all. Most banks, on the other hand, had some level of awareness of the rules
(76%).
Around half of each group that were aware of DAC 6 were
confident of what would constitute a reporting requirement under the
regulations. However, the report suggests that most of the intermediaries who
were aware, tended to have a fairly superficial overview of the regulations.
Intermediaries tended to think that reporting would only be
required if the arrangement was linked to ‘aggressive’ tax planning or
avoidance, and therefore did not feel the arrangements would impact them or
their clients, for whom tax was not the primary consideration. Some speculated
that the regulations could be a burden to their business.
It was very rare for intermediaries to have received enquiries
from their clients about DAC 6. There were mixed views among respondents about
whether they would engage with clients about DAC 6 with some planning to notify
their clients about the regulations, while others would be hesitant to inform
customers in case it alarmed them, especially if they felt it would not affect
the client’s arrangements.
Most intermediaries expected that there will be no impact on
client behaviour as they were not using aggressive tax structures anyway, but some
intermediaries speculated that clients may stop using tax structures under
scrutiny under DAC 6.
In the UK, DAC6 is implemented by the International Tax Enforcement
(Disclosable Arrangements) Regulations, SI 2020/25, with a number of
relaxations to reporting deadlines introduced by the International Tax
Enforcement (Disclosable Arrangements) (Coronavirus) (Amendment) Regulations,
SI 2020/713.
HMRC has published a research report DAC
6: disclosure of cross-border arrangements on the role of intermediaries
in cross-border tax arrangements. DAC 6 requires intermediaries to report
details of certain types of cross-border tax arrangements to tax authorities.
The research aimed to deepen HMRC’s understanding of:
the profile of
the UK intermediary population (accountants, tax advisers, banks, lawyers and
wealth managers) in the context of cross-border arrangements;
the possible
impact of the new regulations on tax planning and avoidance-related activity,
particularly among high net worth individuals and multinational corporates; and
the potential
impact of the new regulations on the intermediary population and the level of
awareness of the new regulations.
According to the report, intermediaries’ awareness of DAC 6 was
generally low, and a large proportion of lawyers (59%), accountants and tax
advisers (47%) and wealth managers (43%) had not heard of the regulations at
all. Most banks, on the other hand, had some level of awareness of the rules
(76%).
Around half of each group that were aware of DAC 6 were
confident of what would constitute a reporting requirement under the
regulations. However, the report suggests that most of the intermediaries who
were aware, tended to have a fairly superficial overview of the regulations.
Intermediaries tended to think that reporting would only be
required if the arrangement was linked to ‘aggressive’ tax planning or
avoidance, and therefore did not feel the arrangements would impact them or
their clients, for whom tax was not the primary consideration. Some speculated
that the regulations could be a burden to their business.
It was very rare for intermediaries to have received enquiries
from their clients about DAC 6. There were mixed views among respondents about
whether they would engage with clients about DAC 6 with some planning to notify
their clients about the regulations, while others would be hesitant to inform
customers in case it alarmed them, especially if they felt it would not affect
the client’s arrangements.
Most intermediaries expected that there will be no impact on
client behaviour as they were not using aggressive tax structures anyway, but some
intermediaries speculated that clients may stop using tax structures under
scrutiny under DAC 6.
In the UK, DAC6 is implemented by the International Tax Enforcement
(Disclosable Arrangements) Regulations, SI 2020/25, with a number of
relaxations to reporting deadlines introduced by the International Tax
Enforcement (Disclosable Arrangements) (Coronavirus) (Amendment) Regulations,
SI 2020/713.
