Transfer Pricing

Treasury written question – answered on 20th February 2019.

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Photo of Angus MacNeil Angus MacNeil Chair, International Trade Committee

To ask the Chancellor of the Exchequer, with reference to HMRC's January 2019 Profit Diversion Compliance Facility, what estimate he has made of the value of the sums recovered from HMRC investigations into transfer pricing arrangements in each of the last five years; how many HMRC investigations into transfer pricing arrangements have been subsequently referred to its Fraud Investigations Service in each of the last five years; and what estimate he has made of the value of HMRC’s current investigations into transfer pricing arrangements.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

On 10 January 2019 HMRC introduced a new Profit Diversion Compliance Facility for Multi-National Enterprises using arrangements targeted by the Diverted Profits Tax (DPT) to give them the opportunity to bring their UK tax affairs up to date.

In the years from 2012/13 to 2017/18, HMRC secured £6.5 billion of additional tax by challenging the transfer pricing arrangements of multinationals.

Year

2012/ 13

2013/14

2014/15

2015/16

2016/17

2017/18

Total Amount

£504 m

£1,137m

£707m

£853m

£1,618m

£1,682m

The information requested regarding how many HMRC investigations into transfer pricing arrangements have been subsequently referred to its Fraud Investigation Service in each of the last five years is not readily available and could only be provided at disproportionate cost. However, in appropriate cases transfer pricing cases are referred to HMRC’s Fraud Investigation Service for their consideration.

HMRC cannot reliably predict the value of its current investigations into transfer pricing arrangements because the outcome is highly dependent on the facts that are determined during the enquiries’ progress.

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