Jonathan Schwarz reviews Automatic Exchange of Information Handbook by John Hiddleston (Bloomsbury Professional, £150).
In a world where data is increasingly playing a dominant role in people’s lives, collection and use of data by tax authorities is becoming a central element of tax administration. The author, John Hiddleston, a tax consultant with several decades’ experience, aims to provide a practical guide to the automatic exchange of information regime in the UK. While exchange of information between tax authorities has been common for many decades, extensive systematic automatic exchange is a relatively recent development, as this timely book attests. A brief history, which includes the now-obsolete banking secrecy principle and predecessors to the current regimes, and the framework that HMRC operates for automatic exchange, bookend the main parts of the work.
The book is divided into two main parts. The first deals with the Organisation for Economic Cooperation and Development’s Common Reporting Standard (CRS) and the US Foreign Account Tax Compliance Act (FATCA). Ten chapters provide an overview of FATCA and CRS, as well as answers to these key questions: what is a ‘reporting financial institution’ (a definition that may include professional firms); and what is a ‘financial account’ in relation to the various kinds of entities and persons within these regimes? Practical issues such as compliance, risk management, due diligence on individual and entity accounts, and reporting are also explained.
The second part of the book deals with disclosure and automatic exchange of certain tax planning arrangements under the EU Mandatory Disclosure regime (DAC 6). Six chapters deal with the ‘what?’, ‘who?’ and ‘how?’ of schemes that meet the hallmarks identified in DAC 6.
Both sets of rules have their own penalty regimes that are discussed in detail. Key points are signalled throughout and flow charts aid the understanding of these complex rules. Practitioners and compliance managers will find this a valuable compilation, written in an easily understandable way, and of great assistance when navigating these complex areas of tax administration.
Brexit has generated huge problems for anyone with cross-border interests and the author has been no exception. The negotiations of the final departure went right up to the last minute, and HMRC’s unexpected announcement that it would not apply significant parts of DAC 6 after the end of the transition period mean that the book is not fully up to date on those subjects. It is nonetheless a worthy contribution to the subject.
About the author
Jonathan Schwarz, Temple Tax Chambers, London
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