HMRC has just released its latest statistics on transfer pricing and Diverted Profits Tax (DPT). In the 6 years to 2017/18, HMRC recorded some £6.5 billion of additional tax by challenging transfer pricing arrangements, with the yield in 2017/18 approaching £1.7 billion. DPT, now in its third year, produced a separate yield of £388 million and the number of DPT notifications has risen to 220.
The other significant change is the dramatic fall in Advance Pricing Agreement (APA) applications, which fell to 16 in 2017/18, half the previous year, coupled with an increase in the number of requests for the Mutual Assistance Procedure (MAP) which have more than doubled over the last 6 years. While the average time taken to resolve MAP cases has remained fairly constant at around 2 years, the average time taken to complete APAs has increased substantially and is now over 3 years.