Tax

HMRC consultation on implementation of disclosable arrangements – Law Society response

The proposals

EU Directive 2018/822 (DAC6) introduces new disclosure and reporting rules for intermediaries involved in designing and promoting certain cross-border arrangements satisfying hallmarks linked to tax or tax reporting.

From 1 July 2020, DAC 6 will require taxpayers and their advisers to report details of such arrangements that fall within the scope of the rules to HMRC.

The government consultation relates to draft regulations and related matters that implement DAC 6 in the UK.

Our view

Our response urges the government to take a proportionate approach to transposing the directive into UK law in an expanded and self-contained set of regulations.

We provide detailed comments on issues that should be addressed by the regulations to achieve that.

Additionally, we set out important points that we consider need to be addressed by government in order to ensure that legal professional privilege, which is a fundamental right, is properly respected and protected.

What this means for solicitors

The implementation of DAC6 in the UK will have important reporting and compliance consequences for solicitors who advise on cross border arrangements.

Next steps

The consultation closed on 11 October.

Read the consultation on the GOV.UK website

On 13 January 2020, HMRC published a summary of responses to the consultation.

The summary of responses and changes to the Regulations recognise several points raised by our consultation response, including:

  • changes to help safeguard legal professional privilege (LPP)
  • amendments to the penalty regime
  • a limit on the definition of “tax advantage” to cover only taxes covered by the Directive