Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
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 transactions through transfer pricing arrangements in each of the last five years; how many transfer pricing specialists HMRC employs; and how many transfer pricing investigations HMRC has undertaken in each of the last five years.
Answered by Mel Stride - Secretary of State for Work and Pensions
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.
HMRC does not hold the information about the value of transactions through transfer pricing arrangements in each of the last five years.
HMRC has increased the number of staff dealing with international tax risks, including transfer pricing. As at 30 April 2018, there were 365 full time equivalent staff working on international risks, including transfer pricing and DPT. HMRC recognises the importance of identifying and tackling international tax risks and is invested in building the capability of the staff involved. These skilled staff work with other expert industry and tax specialists to tackle those cases that represent a substantial risk of tax loss to the Exchequer in line with HMRC’s “resource to risk” compliance policy.
Transfer pricing investigations include enquiries into tax returns, pre-return investigations, and investigations that precede Advance Pricing Agreements (APAs) or Advance Thin Capitalisation Agreements (ATCAs). The numbers of transfer pricing investigations HMRC initiated in the years 2013/14 to 2017/18 were:
| 2013/14 | 2014/15 | 2015/16 | 2016/17 | 2017/18 |
Number of Investigations | 462 | 427 | 384 | 250 | 244 |
Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
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 transactions under investigation; and how many inquiries resulted in the view that the factual pattern outlined to HMRC at the start of an enquiry did not stand up to scrutiny once tested in each of the last five years.
Answered by Mel Stride - Secretary of State for Work and Pensions
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.
HMRC does not hold the information about the value of transactions under investigation.
HMRC does not hold information about how many inquiries resulted in the view that the factual pattern outlined to HMRC at the start of an enquiry did not stand up to scrutiny once tested in each of the last five years.
However, in circumstances where HMRC believes it may have been misled by information provided by customers in the context of transfer pricing investigations, the matter will be referred to its Fraud Investigation Service.
Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
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.
Answered by Mel Stride - Secretary of State for Work and Pensions
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.