HMRC carried out 362 reviews into businesses’ transfer pricing practices last year with the amount of tax potentially under dispute rising substantially to £3.8bn according to figures compiled by Pinsent Masons. Despite a 10% drop in the number of reviews between 2014/15 and 2015/16 the amount of tax at stake rose by 60%.
The figure of £3.8bn is an estimate of the maximum potential additional tax liability across all enquiries undertaken by HMRC’s large business directorate. The amount due tends to drop after individual investigations.
Commenting on transfer pricing enquiries Heather Self tax partner at Pinsent Masons said: ‘The value of tax HMRC believes it could be owed has risen substantially and we are likely to see increased activity in this space.’
