In 2018, the EU implemented a directive known as DAC6 in an
effort to promote tax transparency. The UK transposed DAC6
into national legislation in 2020. The law
placed new obligations on relevant taxpayers and intermediaries,
which include accountants, tax advisers, banks, lawyers and wealth
managers , among others. The law required these parties to report
details of cross-border arrangements that met potentially
aggressive tax avoidance characteristics.
Due to the pandemic, the UK government extended some DAC6
reporting deadlines. However, intermediaries and relevant taxpayers
were still obligated to
comply with DAC6 or risk facing strict
sanctions.
In a surprising turn of events — and despite
various governmental assurances to the contrary
— the UK recently made legislative changes that significantly
limit the scope of its DAC6 regime. The changes are effective from
the end of the Brexit transition period on 31 December 2020. HMRC
also announced that the UK
