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Measuring the yield from DPT

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HMRC has published a methodological note setting out how it measures the yield from diverted profits tax (DPT) attributable to ‘behavioural change’.

The DPT was introduced in April 2015 to discourage tax avoidance on the part of multinational enterprises by charging tax at 25% on certain contrived arrangements. HMRC measures the yield from DPT not only in terms of receipts from charging notices issued directly, but also through estimates of additional tax collected as a result of behavioural change.

In 2017/18, of the total of £388m collected, £219m came from DPT charging notices, while £169m was attributed to behavioural change.

HMRC divides behavioural change into two types, resulting either from targeted compliance activity, or ‘spontaneous’ behavioural change in response to the introduction of DPT. HMRC acknowledges that the bulk of the additional revenue results from compliance activity, rather than spontaneously.

HMRC says it is now confident that it can identify all cases of spontaneous behavioural change. Where in previous years the figures for additional corporation tax liabilities from companies HMRC had identified as having changed their behaviour were grossed up to account for any cases not yet identified, no such grossing up was applied to the 2017/18 figure.


Issue: 1410
Categories: News