Diverted profits tax yields UK over GBP 5 billion in extra tax

Diverted profits tax yields UK over GBP 5 million in extra tax

Between 2019-2020, HMRC secured GBP 480 million through DPT investigations.

Diverted profits tax yields UK over GBP five million in extra taxUK’s diverted profits tax (DPT) has fetched over GBP 5 billion in extra tax from multinationals, the UK tax authority announced on January 27.

The 25% DPT was introduced in 2015 to counter arrangements intentionally used by some MNEs to shift their profits abroad and avoid paying tax they rightly owe in the UK.

Between 2019-2020 alone, HMRC secured GBP 480 million through DPT investigations. HMRC is currently carrying out around 100 investigations into diverted profits arrangements by MNEs.

HMRC’s Director of Large Business, Jo Wakeman, said: “I’m pleased to say we’re making progress in tackling those who think it’s ok to shift their profits offshore and avoid paying tax in the UK on their economic activities here.”

“The GBP 5 billion secured so far since the Diverted Profits Tax was introduced shows that it’s helping to bring in additional money for the UK’s vital public services.”

The author is Alex Hunter, Editor, TP News. He oversees and updates the publication and also  regularly writes news stories about transfer pricing and international tax law. Alex is reachable at editor@transferpricingnews.com