Proposed deferral of DAC6 is not an exemption from duty to report

On the 11 May, the EU Commission proposed a three-month postponement of some of the exchange of information deadlines under DAC6.  However, DAC6 reporting rules will still come into force on 1 July 2020 as the deferral only relates to the reporting of certain cross-border arrangements.  

It is important to note that while the reporting deadlines have been extended, it is still necessary to report all trigger events. Accordingly, we still recommend making contemporaneous reports of triggering even if it may not be necessary to make a report for several months.  Please see our original Briefing Note on DAC6 for a summary of what events trigger reporting obligations under DAC6 and if you have any queries please contact our expert Geoff May, who would be delighted to clear up any confusion.  

In connected developments, it is understood that HMRC will confirm how these EU Commission proposals will affect the UK DAC6 implementation regulations as and when the Commission’s proposals are final.  Any further clarification from HMRC will be welcome as it has not yet issued its promised guidance as well as there being a continuing lack of clarity on the IT systems needed to make a report to HMRC.    

More helpfully, while failure to meet a reporting deadline can incur a penalty, HMRC’s guidance on appealing penalties was amended in May specifically to consider coronavirus as a ‘reasonable excuse’ for missing a deadline, including on reporting arrangements disclosable under DAC6.  This amended guidance confirms that:, “provided the report is made without unreasonable delay after those difficulties are resolved” no penalty should be applied.  If it is anticipated a DAC6 report may be made late, it is important to preserve and retain anything which evidences why this was so and also to show that any late filing was made as soon as practical to do so.