From his earliest memory he had wanted to be a professional actor but parental influence led to him to study law instead. Two years of study confirmed in his mind that Daniels didn't want to be a lawyer at all, so he returned to his original plan.

Leaving college in 1974, Daniels won the prestigious Carlton Hobbs BBC Radio Award which gave him a place in the BBC Drama Repertory Company. After many productions for the BBC, playing anything from a prince to a parrot, he finally left to join the National Theatre of Great Britain at The Young Vic.

It was whilst there that he got the call to meet George Lucas about a science fiction movie being filmed in England. Initially he refused the interview, but coerced by his agent, Daniels did meet the director and Star Wars' human/cyborg relations droid C-3PO was born.

Although the Star Wars saga has formed a major part of Daniels' career, he has interspersed those movies with a variety of television and stage appearances. These range from situation comedies such as Square Deal and Three Up Two Down to more serious dramas such as Prime Suspect and Priestly's Dangerous Corner.