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HMRC’s introduction of a settlement Facility aimed at businesses with a risk of “profit diversion” confirms observations that we have made in our recent blogs. In summary, HMRC:

Furthermore, with the introduction of the Facility, HMRC hopes to shift a significant element of the resourcing requirements associated with a typical TP / DPT investigation from HMRC onto businesses and their advisors. Self assessment already requires the business to get its TP ‘right’. However, using the Facility takes this much further and in essence asks the MNE to conduct a deeper and wide-ranging review into its own affairs and to back up its conclusions with evidence.

How business should respond

Where there is a possibility, however remote, that you could become the target of HMRC’s Diverted Profits team, you should be considering what you need to do. This is particularly advisable if you:

If your review uncovers no areas of concern, this may provide you with sufficient comfort that no further action is required.