Regulatory Agenda for July 2020

To help businesses keep track of updates in UK legislation and policies, VinciWorks regularly publishes a regulatory update. Since our last update in June, the government has released further information on its COVID-19 support schemes.

This edition of our regulatory agenda provides an overview of regulatory changes or new regulations recently passed, proposed, or on the agenda which are relevant to key compliance areas of VinciWorks’ clients in the UK. These include Acts of Parliament relating to COVID-19, DAC6 implementation, IR35, California Consumer Privacy Act, sanctions, gender pay gap reporting and more.

This edition of the regulatory agenda covers the following:

  • COVID-19 update – back to work guidance and government support schemes
  • EU developments
  • Bills before Parliament
  • Upcoming legislation
  • Current open consultations
  • Closed consultations
  • Key points of the Queen’s speech that are relevant to compliance
  • Bills, Directive and government initiative on the horizon

Download Regulatory Agenda

DAC6 compliance – Why should taxpayers care?

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DAC6 is a European Directive aimed at tackling tax avoidance and strengthening tax transparency, as well as improving information sharing between EU member states. The Directive imposes mandatory reporting on lawyers, accountants, tax advisers, bankers, and other so-called “intermediaries”.

Are taxpayers required to report DAC6 arrangements in addition to annual tax filings?

As a taxpayer, DAC6 will affect you. While the primary reporting obligation is on intermediaries, there are some cases where the reporting onus will be on the taxpayer. These include the following situations:

  • When there is no intermediary involved in an arrangement
  • When the only intermediary involved does not have a presence in the European Union (or the UK)
  • When legal professional privilege applies to the sole intermediary representing you, and you chose not to waive privilege
  • When a company within your group acts as an intermediary for arrangements within the group 
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Germany and Finland do not postpone DAC6 reporting

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The deadline for initial reports is 31st July 2020.

In June, the European Union Council approved an optional six-month deferral of DAC6 reporting requirements due to COVID-19. 22 member states have availed themselves of that deferral but two, Germany and Finland, have not.

On 6 July 2020, Kristina Wogatzki, a spokesperson for the German Finance Ministry announced at a press conference that “Germany will not postpone the deadline, the reporting obligation begins on July 1”. Wogatzki stated that the Finance Ministry’s reporting systems are ready and can accept reports. She dismissed deferment by saying that since it was only tabled in June, she expects most firms to have prepared for 1 July implementation. She added that this deadline only affects firms that have a reporting obligation in Germany.

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VinciWorks releases new conflicts of interest course

The online conflicts of interest course includes interactive scenarios to test users’ ability to identify a potential conflict of interest

We have now released a new conflicts of interest compliance course. Conflicts of Interest in the Workplace: Understand Your Influences provides learners with a 15-minute overview of conflicts of interest in the workplace. The interactive course explains what a conflict of interest is and covers different situations where an employee might encounter a conflict of interest.

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EU allows delay of up to six months for DAC6 reporting

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Updated 8 July 2020

Important update: Germany, Austria and Finland opt to not postone.

On 3 June, 2020, Member State representatives reached an agreement to allow an optional six-month deferral of reporting deadlines for DAC6.

On 19 June 2020, the European Parliament voted in favour of the EU Commission’s proposed deferral and on 24 June the European Union Council approved the postponement.

21 member states have postponed, most for the full six months. Notably, Germany, Austria and Finland have not.

What is the new DAC6 timeline?

  • Historical arrangements where first steps were implemented between 25 June 2018 and 30 June 2020: Optional deferral until 28 February 2021
  • First transfer of information between EU Member States: 30 April 2021
  • New arrangements where the reporting triggers are met between 1 July 2020 and 31 December 2020: The 30 day filing period begins 1 January 2021
  • Marketable Arrangements: First periodic report expected by 30 April 2021

Countries deferring DAC6

21 EU countries have opted to postpone to varying degrees. Germany, Austria and Finland have not. Here is a partial list of postponements:

  • Belgium has postponed reporting by six months
  • Luxembourg intends to postpone
  • UK‘s HMRC has postponed DAC6 reporting by six months
  • Ireland has postponed by six months
  • The Netherlands have postponed by six months
  • Sweden and Hungary plan to postpone with more guidance forthcoming
  • France plans to postpone by six months
  • Poland has postponed as for intermediaries until 31 December 2020, for taxpayers until 31 January 2021 and for service providers until 28 February 2021
  • Romania has postponed the reporting deadlines by six months. The postponement was adopted through an Emergency Ordinance amending the initial law transposing DAC6, published in the Official Journal, no. 579, Part I, on 1 July, 2020
  • Latvia has postponed by six months
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HMRC publishes guidance on how DAC6 will work

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HMRC has published its ‘final guidance’ on how DAC6 will operate in the UK. It includes details on the interpretation of the hallmarks, penalties and reasonable excuses.

Click here to download HMRC’s DAC6 guidance

This guidance is an update to the draft that HMRC published in March 2020. Although the guidance is ‘final’, HMRC have noted that “there are still a small number of updates to this guidance which are pending and will be made in the coming weeks”.

If you are familiar with the guidance from March, you can download a comparison between the draft and final DAC6 guidance.

DAC6 training updated to reflect EU Commission’s reporting delay

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DAC6 is a European regulation aimed at tackling tax avoidance and tax evasion, strengthening tax transparency and improving information sharing between EU Member States. The Directive requires lawyers, accountants, tax advisers, bankers and other “intermediaries” to report certain aggressive cross-border arrangements. 

VinciWorks’ DAC6 training is recommended in order to understand the intricacies of these hallmarks and to determine which transactions must be reported.

Due to the Covid-19 pandemic, the European Commission has confirmed an optional deferral of the implementation of DAC6 by six months. Each member state will now decide whether they will avail themselves of the optional deferral. Most countries are set to defer reporting, with several, including the UK, Ireland and France already having announced their intentions to defer reporting. We will continue to update this blog as more countries decide on whether and how to implement the new timeline.

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Anti-money laundering training – choosing the right course

VinciWorks has released new anti-money laundering training that replaces our flagship advanced and fundamentals courses. The training is available in two versions, tailored to different risk profiles.

Anti-Money Laundering: Advanced

Anti-money laundering course dashboard
Anti-Money Laundering: Advanced begins with a course builder, allowing users to instantly build the most relevant course for them

This is a 90-minute course geared towards staff with higher exposure to money laundering risk. This includes staff involved in client onboarding or due diligence. The course provides a detailed explanation of how money laundering works and how to conduct CDD. It also details all relevant laws and features an exhaustive list of red flags.

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Is DAC6 the next target for HMRC’s Corporate Criminal Offence (CCO) audits?

HMRC has stepped up their Corporate Criminal Offence (CCO) investigations. HMRC recently responded to a Freedom of Information request that showed that on 31 December 2019, HMRC had 9 live investigations and 21 further opportunities under review in various industry sectors. The results of these audits will be made public as soon as appropriate to do so. 

What is a Corporate Criminal Offence (CCO) audit?

The Corporate Criminal Offences (CCO) for the failure to prevent the facilitation of tax evasion were introduced by Part 3 of the Criminal Finances Act 2017. HMRC has made government guidance available. The UK government also plans to create a new Anti-Tax Evasion Unit within HMRC to step up the investigations for Corporate Criminal Offences.

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