In an update to its International Exchange of Information Manual, HMRC has confirmed that reporting deadlines under DAC6 have been deferred by six months, meaning the first deadline is now 1 January 2021, rather than 1 July 2020.
The rules will come into force as planned on 1 July 2020, however, meaning that all transactions which should have been reported will still need reporting, but at a later date. This means:
- For arrangements where the first step in the implementation took place between 25 June 2018 and 30 June 2020, reports must be made by 28 February 2021, instead of 31 August.
- For arrangements which were made available for implementation, or which were ready for implementation, or where the first step in the implementation took place between 1 July 2020, and 31 December 2020, reports must be made within the period of 30 days beginning on 1 January 2021.
- For arrangements in respect of which a UK intermediary provided aid, assistance or advice between 1 July 2020 and 31 December 2020, reports must be made within the period of 30 days beginning on 1 January 2021.
- Arrangements which become reportable on or after 1 January 2021 must be reported as normal.
- Where periodic reports are required in relation to marketable arrangements, the first such report must be made by 30 April 2021.
The change goes further than the three-month deferment proposed by the European Commission in May, and has been welcomed by ICAEW’s Tax Faculty who suggested that three-months might not be long enough.
Frank Haskew, Head of the Tax Faculty, said: “The announcement of this 11th hour deferral of the reporting deadline by six month will be welcomed by UK businesses and advisers. However, it is important to remember that only the reporting deadline has been extended by six months: the start date for potentially reportable transactions remains at 25 June 2018.”
He continued: “The deferral will give more time for businesses and HMRC to develop and test thoroughly their reporting systems and for the draft guidance to be finalised.”
HMRC has also confirmed that while amendments to Regulations may not be in place by 1 July 2020, no action will be taken for non-reporting during any period between 1 July and the date that the amended Regulations come into force.
The IT system that will be used for reporting will not be switched on 1 July and HMRC is to use the additional time to work with taxpayers and intermediaries on the system.
HMRC will also be publishing additional guidance to help businesses in meeting their reporting obligations.
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