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HMRC transfer pricing tax haul jumps almost 50% in 2020/21

Statistics released by HMRC show that transfer pricing revenues have increased from £1.45bn in the 12 months to 31 March 2020 to £2.16bn in 2020/21. This incorporates transfer pricing enquiries (including real time interventions), advance pricing agreements (APAs), advance thin capitalisation agreements (ATCAs) and mutual agreement procedure (MAP) cases. It is also no coincidence that tax paid under Diverted Profits Tax investigations has more than doubled in 2020/21, demonstrating just how effective HMRC's multi-channel focus on transfer pricing is proving.

Worryingly, on the flip side case times are up across the board, with transfer pricing enquiries now taking on average 36 months to conclude, up from just over 31 months in 2019/20, and APAs are taking on average 55 months to conclude in 2020/21, up from 48 months in 2019/20. ATCA and MAP times are similarly increased, all of which means that the timing of when multinationals engage with HMRC is ever more important.

See further details from the transfer pricing and diverted profits tax statistics, 2020 to 2021.

The transfer pricing rules and the Diverted Profits Tax (DPT) are important elements in a range of measures to make sure multinationals pay the right amount of tax on profits arising from their economic activities in the UK.

Tags

tax, hmrc, transfer pricing

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