IEIM722030 - Taxpayer or Intermediary

MDR does not explicitly deal with the situation where a person could potentially be both an intermediary and a reportable taxpayer. For the purposes of reporting obligations in the UK, a person does not need to report as both a reportable taxpayer and an intermediary; one report will be sufficient.

Consider a person who is the designer and promoter of a CRS avoidance arrangement or opaque offshore structure. It may be that as part of the arrangement, one step in a series of transactions involves money passing through the promoter’s account. It could be argued that the intermediary is therefore a reportable taxpayer as they have implemented the first step of the arrangement. However, as the promoter and designer of the arrangement, HMRC would normally expect the person to report as an intermediary.

Provided that all relevant information is reported, and there is no attempt to delay or avoid reporting, HMRC will not seek to charge penalties where a person in this particular position reports as an intermediary instead of as a reportable taxpayer, or vice versa.

Where there is a group of companies, one company within the group may be acting as an intermediary in relation to an arrangement where other companies in the group are reportable taxpayers. For example, the treasury company within the group may provide advice to other group companies about certain transactions or structures. If the only reportable taxpayers in relation to the arrangement are part of the same group, HMRC would not object to the arrangement being reported by or on behalf of the reportable taxpayers rather than by the group company which is an intermediary. As long as correct and accurate reporting occurs, and there is no attempt to delay reporting, HMRC would not seek to charge penalties in such a situation.