HMRC is disputing a record £20bn in tax with British
multinationals despite launching a disclosure facility to encourage them to
settle their tax affairs voluntarily, according to freedom of information data
obtained by Fitzgerald & Law. The firm reports that MNEs are being targeted
as part of an HMRC clampdown on diversion of profits to low tax jurisdictions.
The £20bn figure is said to be a 53% increase since the £12.7bn disputed in 2014/15.
Melissa Christopher, partner at Fitzgerald & Law, comments:
‘HMRC is under growing pressure to increase tax revenues. Despite the success
of the diverted profits tax in increasing corporation tax receipts, HMRC is
stepping up its focus on UK headquartered multinationals, which it clearly
feels are continuing to make widespread use of artificial arrangements to
divert profits into low tax jurisdictions.
‘Transfer pricing sits high on the list of global tax planning
tools in difficult times to reduce global taxes and increase precious cash
flows. Many companies are making significant changes to their intercompany
pricing in light of the current economic reality. HMRC and other tax
authorities will likely be looking at any changes to transfer pricing
arrangements closely and ready to challenge businesses where they engage in
aggressive tax planning.’
HMRC is disputing a record £20bn in tax with British
multinationals despite launching a disclosure facility to encourage them to
settle their tax affairs voluntarily, according to freedom of information data
obtained by Fitzgerald & Law. The firm reports that MNEs are being targeted
as part of an HMRC clampdown on diversion of profits to low tax jurisdictions.
The £20bn figure is said to be a 53% increase since the £12.7bn disputed in 2014/15.
Melissa Christopher, partner at Fitzgerald & Law, comments:
‘HMRC is under growing pressure to increase tax revenues. Despite the success
of the diverted profits tax in increasing corporation tax receipts, HMRC is
stepping up its focus on UK headquartered multinationals, which it clearly
feels are continuing to make widespread use of artificial arrangements to
divert profits into low tax jurisdictions.
‘Transfer pricing sits high on the list of global tax planning
tools in difficult times to reduce global taxes and increase precious cash
flows. Many companies are making significant changes to their intercompany
pricing in light of the current economic reality. HMRC and other tax
authorities will likely be looking at any changes to transfer pricing
arrangements closely and ready to challenge businesses where they engage in
aggressive tax planning.’
