New official transfer pricing statistics show that HMRC settled a record 175 cases involving corporates shifting profits overseas in 2021/22, up from 124 in the previous year. HMRC’s transfer pricing yield statistics show that the department collected £1.5bn in extra tax as a result (broadly in line with the average for the last six years: £1.6bn).
The transfer pricing yield figures include additional tax revenue from enquiries, advance pricing agreements, advance thin capitalisation agreements and transfer pricing mutual agreement procedure cases.
Commenting on the data, Steven Porter, partner and head of tax disputes and investigations at Pinsent Masons, said: ‘Given the state of public finances, HMRC is keen to stop profits from businesses being “transferred” from the UK to lower-tax jurisdictions. The success of their investigatory activities to date means this will clearly be an area of continued focus.
‘HMRC has become much stricter in its interpretation of what makes an acceptable transfer pricing arrangement as well as more closely examining the implementation of any transfer pricing arrangements. Cross-border transactions now carry even greater risk for multinationals. It is more important than ever that businesses can fully justify to HMRC how they price intra-group transfers.’
New official transfer pricing statistics show that HMRC settled a record 175 cases involving corporates shifting profits overseas in 2021/22, up from 124 in the previous year. HMRC’s transfer pricing yield statistics show that the department collected £1.5bn in extra tax as a result (broadly in line with the average for the last six years: £1.6bn).
The transfer pricing yield figures include additional tax revenue from enquiries, advance pricing agreements, advance thin capitalisation agreements and transfer pricing mutual agreement procedure cases.
Commenting on the data, Steven Porter, partner and head of tax disputes and investigations at Pinsent Masons, said: ‘Given the state of public finances, HMRC is keen to stop profits from businesses being “transferred” from the UK to lower-tax jurisdictions. The success of their investigatory activities to date means this will clearly be an area of continued focus.
‘HMRC has become much stricter in its interpretation of what makes an acceptable transfer pricing arrangement as well as more closely examining the implementation of any transfer pricing arrangements. Cross-border transactions now carry even greater risk for multinationals. It is more important than ever that businesses can fully justify to HMRC how they price intra-group transfers.’
