Gransnet forums

News & politics

EU Tax Directive - what a surprise ! (not)

(16 Posts)
biba70 Sat 02-Jan-21 18:59:41

DAC 6 to be replaced by OECD rules for UK intermediaries from 2021

31 December 2020: HMRC has confirmed that the UK will no longer be applying DAC 6 in its entirety following conclusion of the Free Trade Agreement with the EU. Only arrangements that would have fallen within Category D of DAC 6 will now need to be reported, in line with the OECD’s mandatory disclosure rules.

DAC 6 is a system of mandatory reporting of cross-border tax arrangements affecting at least one EU member state where the arrangements fall within one of a number of “hallmarks”.

Despite the fact the UK was leaving the EU, it implemented DAC 6 into domestic law, requiring intermediaries with a connection to the UK to disclose arrangements to HMRC in relation to which they acted as “promoters” or “service providers”. The first disclosures were due to be made by 31 January 2021.

As provided for in the Free Trade Agreement between the UK and the EU, it has been agreed that the UK will now apply the OECD mandatory disclosure rules (MDR) instead.

The main difference between the OECD MDR and DAC 6 is that only arrangements that would have fallen within Category D of Part II of DAC 6 need to be reported.

As a stop gap measure, the UK regulations are being amended so that they only apply to arrangements falling under the category D hallmarks. These are arrangements designed to undermine tax reporting under common reporting standard and transparency rules and are split into two types:

Arrangements which have the effect of undermining reporting requirements under agreements for the automatic exchange of information.
Arrangements which obscure beneficial ownership and involve the use of offshore entities and structures with no real substance.

This change significantly reduces the number of situations and arrangements which will need to be reported to HMRC under international reporting standards, although the UK’s own disclosure of tax avoidance schemes (DOTAS) rules will continue to apply.

In the coming year, the government will repeal the legislation implementing DAC 6 in the UK and implement the OECD’s MDR as soon as practicable, to transition to international, rather than EU standards on tax transparency.

MaizieD Sat 02-Jan-21 21:49:19

That's been the plan all along. No surprise at all. Tax haven UK.

I'm not too sure why the Labour Party isn't having something to say about this, but they're much too busy infighting.

vampirequeen Sat 02-Jan-21 23:47:50

Like Maizie says ..that was the plan all along. There was no way that the rich were going to stop using their tax loopholes and havens. Heaven forbid that they should pay their fair share of taxes.

Cindersdad Sun 03-Jan-21 11:15:47

This is why the far right promoted Brexit. They don't care if or how much it hurts the rest of us.

Whitewavemark2 Sun 03-Jan-21 11:34:01

I see that the top 1% of wealthy are becoming even more and massively so.

GrannyGravy13 Sun 03-Jan-21 12:13:29

Guardian 13th November 2019 stated that the top 1% of earners account for over 1/3 of tax revenue in U.K.

42% of U.K. population pay no tax.

GrannyGravy13 Sun 03-Jan-21 12:16:47

Stuart Adams a senior research economist at the IFS said

"Taxes in the U.K. Are not high by international standards but they are high by historical standards, and our tax revenues are ever more reliant on a small group of high income tax payers"

(from same Guardian article)

nahsma Sun 03-Jan-21 12:18:50

According to today's Observer, richest 1% of the UK population account for 25% of UK wealth. ABdeP Johnson and his cabinet of nincompoops must be SO proud.

GrannyGravy13 Sun 03-Jan-21 12:40:59

Maybe a good time to check where your pension schemes and ISA’s are invested?

Welshwife Sun 03-Jan-21 12:44:25

Earning money and paying tax does not mean that they are the richest people does it? As far as I can see the richest people have moved their money away to places where they do not need to pay tax in U.K.

Lucretzia Sun 03-Jan-21 12:50:12

As GrannyGravy13 has pointed out, the top 1% pay 27% tax

The highest 1% of income taxpayers account for 27% of all income tax. It’s a more top-heavy tax than both National Insurance Contributions (NICs) and VAT, although less so than Stamp Duty Land Tax and Inheritance Tax.

So how much more should they have to pay?

vampirequeen Sun 03-Jan-21 12:58:43

They should be taxed on all their income apart from the allowances we all enjoy. There should be no loopholes and no way to hide money in offshore accounts. They may appear to pay more tax than the average person but then their income is that much higher so if you look at the cash amount they seem to pay far more but if you look at the percentage they pay it's no higher and often lower than most taxpayers.

vampirequeen Sun 03-Jan-21 12:59:16

Sorry should have said percentage of their income

Ilovecheese Sun 03-Jan-21 13:05:33

Strongly agree with you vampirequeen.

Lucretzia Sun 03-Jan-21 13:08:33

Well maybe they should all just go and live abroad and not pay any tax at all.

That will be of massive benefit to the rest of us, won't it?

Granny23 Sun 03-Jan-21 13:22:09

And of course, the less tax the super rich pay, the more the less well off have to pay. As for me, I am fortunate??? to pay no direct tax at all as my income is less than the personal allowance. Still have to pay VAT. Council, Car petrol & TV Tax, etc. at the same rate as the super rich.