HMRC collected an extra £2.16bn in tax from investigations into multinational corporates shifting profits overseas in the tax year 2020/21, according to official figures – an increase of nearly 50% over the previous year.
Law firm Pinsent Masons notes that HMRC’s increased scrutiny of the tax strategies of large corporates has made it increasingly difficult for them to shift profits to lower tax jurisdictions, as evidence by these latest figures which indicate that HMRC is becoming more aggressive in its approach to transfer pricing and more likely to disagree with companies’ justifications for their transfer pricing arrangements.
Steven Porter, partner and head of tax disputes and investigations at the firm said: ‘HMRC is becoming much more stringent in its interpretation of what makes an acceptable transfer pricing arrangement. It is critically important that any intra-group transfers are supported by appropriate economic reports and that the arrangements that are in play are actually operated in the manner the group intends them to be when established.’
The statistics also highlight just under £1.5bn of additional corporation tax raised from diverted profits investigations – up by more than 100% compared to the previous year.
HMRC collected an extra £2.16bn in tax from investigations into multinational corporates shifting profits overseas in the tax year 2020/21, according to official figures – an increase of nearly 50% over the previous year.
Law firm Pinsent Masons notes that HMRC’s increased scrutiny of the tax strategies of large corporates has made it increasingly difficult for them to shift profits to lower tax jurisdictions, as evidence by these latest figures which indicate that HMRC is becoming more aggressive in its approach to transfer pricing and more likely to disagree with companies’ justifications for their transfer pricing arrangements.
Steven Porter, partner and head of tax disputes and investigations at the firm said: ‘HMRC is becoming much more stringent in its interpretation of what makes an acceptable transfer pricing arrangement. It is critically important that any intra-group transfers are supported by appropriate economic reports and that the arrangements that are in play are actually operated in the manner the group intends them to be when established.’
The statistics also highlight just under £1.5bn of additional corporation tax raised from diverted profits investigations – up by more than 100% compared to the previous year.
