The powers in section 84 of the Finance Act 2019 allow for regulations to be made by statutory instrument to implement Council Directive (EU) 2018/822, which amends Directive 2011/16/EU (on administrative cooperation in the field of taxation) as regards to mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements.
The UK is legally obliged to transpose this Directive before the UK ceases to be a member of the European Union and during an Implementation Period. The UK will be leaving the EU by 31 January with the deal the PM has negotiated. The House of Commons began the process of ratifying the deal before Christmas, meaning we can leave the European Union on 31 January 2020.
The regulations will require taxpayers and their advisers to provide details of certain types of cross-border arrangements to HMRC, where the arrangements have features commonly seen in schemes used to avoid or evade tax. This will provide HMRC with additional information to identify and challenge offshore non-compliance and deter people from engaging in aggressive tax arrangements.
Section 84(8) of the Finance Act 2019 provides that no regulations may be made under that section unless the Chancellor of the Exchequer has laid before the House of Commons a report on how the powers in that section are to be exercised in each of the scenarios set out in subsection 9 – i.e. in the very unlikely event that the UK leaves the European Union and the Withdrawal Agreement has not been ratified, as well as if the Withdrawal Agreement has been ratified. This report sets out the planned approach to both of the scenarios, as per the requirement of the legislation.