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HMRC collects £281m in “Google tax”

HMRC collected a combined £281mn in revenue from diverted profits tax (DPT) in 2016-17, a £250m climb from the previous 12 months, according to the organisation’s own data.

The £281m includes £138m collected from DPT charging notices, as well as changes in behaviour brought about by additional corporation tax after either HMRC interventions or business structure amendments without intervention from the tax body.

The DPT, introduced in 2015, has earned the nickname “Google tax”. Its aim is to discourage harsh tax planning structures employed by multinational companies with the purpose of redirecting UK profits.

Legal eagles Pinsent Masons, however, said that a number of disputes involving DPT turn into disagreements over transfer pricing, and that HMRC has been spending more and more time on settling cases.

Company partner, Heather Self, said:

“Transfer pricing disputes are taking HMRC nearly two-and-a-half years to settle – a year longer than its internal target. This is creating a serious backlog.

“Businesses are being bogged down for up to five years in some cases, as HMRC’s internal targets count from the time an enquiry is opened, which is typically up to two years after the transactions.”

HMRC seems to be devising constant new ways of clamping down on businesses attempting to avoid tax, as well as religiously ensuring that these latest rules are applied, all of which makes it a time when businesses need to be especially vigilant when it comes to tax and accountancy. It is more important than ever for them to call upon an accountant in the Wirral to ensure that they are playing by the latest rulebook.

Posted by Peter
September 28, 2017
HMRC

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