The latest HMRC TP and DPT Statistics 2019/20 are now available. There are three interesting facts about these statistics:
- Interestingly although the 'yield' has increased since last year it is still below the peak years of 2016-2018 which followed the introduction of the Diverted Profits Tax.
- The number of settled TP enquiries is lower than in 2018/19 and the average time to settle is still over 2.5 years.
- APA applications are up on last year, however there seems to be a significant back-log as the average time to reach agreement has climbed to 4 years.
It is clear that TP remains the cornerstone of HMRC audit activity. It is likely that this trend will continue going forward, particularly as the impact of COVID-19 continues to build pressure on public finances.
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The transfer pricing rules and the Diverted Profits Tax (DPT) are important elements in a range of measures to make sure multinationals pay the right amount of tax on the share of their profits that arises in the UK.
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