HMRC has announced that the amount of tax under consideration for transfer pricing has jumped by 74% from £6 billion to £10.4 billion. The tax under consideration means the amount which is subject to some form of investigation whether formal or informal. It is HMRC’s estimate of the maximum potential additional tax liability when it begins checking a company’s tax affairs. Normally HMRC receives about half of the amount under consideration when the settlement is reached.
Transfer pricing and thin capitalisation now account for nearly 1/3 of the total amount under investigation in respect of large companies. It demonstrates conclusively that companies which do not pay this area sufficient attention, will soon pay the price.
Primondell is running a series of courses on different aspects of transfer pricing including understanding the fundamentals; creating good transfer pricing documentation; and achieving operational effectiveness in dealing with transfer pricing challenges.