Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of whether the UK's tax treaty arbitration arrangements allow multinational companies to delay the collection of UK tax in transfer pricing and Diverted Profits Tax disputes; and whether the Government will review those arrangements to ensure that profits generated in the UK are taxed fairly in the UK and that UK tax revenues are protected.

There is no special provision or allowance under the UK’s tax treaties for the suspension or deferral of tax payments by multinational companies.

For transfer pricing cases, HMRC may suspend collection of the disputed tax while a Mutual Agreement Procedure (MAP) case is ongoing. MAP may include mandatory binding arbitration where provided for under the relevant treaty, however, there is no additional or separate right to delay payment of UK tax in relation to arbitration. Postponement of tax during MAP is only available under the same conditions that apply to domestic administrative or judicial remedies. Interest will continue to accrue, where appropriate, on any underpaid tax ultimately found to be due.

DPT charges cannot be postponed on any grounds. The Diverted Profits Tax (DPT) was repealed by the Finance Act 2026 and replaced by the Unassessed Transfer Pricing Profits (UTPP) rules, as part of a wider package of reforms to simplify and modernise the legislation relating to transfer pricing, diverted profits tax and permanent establishments. Charges under the UTPP rules also cannot be postponed on any grounds, except to the extent that tax has already been paid on the same profits.