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MDR: ICAEW concerned over backdated reporting


Published: 09 Feb 2022 Update History

ICAEW’s Tax Faculty welcomes that the new rules designed to implement the OECD’s model mandatory disclosure regime are targeted at those arrangements that might allow or facilitate tax evasion. However, it has concerns over the backdated reporting requirements, which exceed those of the predecessor DAC 6 legislation.

The Tax Faculty’s response to the consultation on draft regulations to implement the mandatory disclosure regime (MDR) in the UK, published as ICAEW REP 10/22, expressed significant unease at the requirement to report historic arrangements as far back as 2014. This requirement applies to common reporting standard (CRS) avoidance arrangements. 

One of the biggest challenges raised was that existing statutory time limits around record keeping do not require records to be retained back to 2014. Similarly, ICAEW members felt that the requirements around the General Data Protection Regulation (GDPR) would mean they would not legally be permitted to retain clients’ records for this length of time in certain circumstances. 

Given the challenges around information availability, ICAEW was also keen to understand how penalties would operate under the rules. Although members considered reports to only be required in exceptional circumstances, they wish to be compliant and able to demonstrate compliance to HMRC. However, they are concerned that the information limitations may make this almost impossible to do in practice.

Members also indicated that, as the scope of the rules had narrowed considerably, an online form would be a more appropriate way to report as opposed to an xml file upload (the format proposed under DAC 6). Although a report under these rules was considered a very rare event, members recognised it was important to have appropriate reporting mechanisms in place ‘just in case’ in light of the short 30-day reporting window. 


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