Transfer-pricing team yields £1.1bn for HMRC

HMRC yielded £1.1bn in tax from multinationals last year, as it actively challenged transfer-pricing agreements

The Revenue said that £5.8bn in tax has been secured by the specialist group set up to investigate pricing agreements between companies in the same multinational group since it was established in 2008.

HMRC announced today that it had hit multinationals with a total of £1.1bn in tax bills in 2013/14, as it effectively investigated transfer pricing arrangements, almost double that of 2012/13, at just £504m. However, the total remains below the previous high of £1.59bn secured in 2008/09.

The new diverted profits tax or “Google Tax” which was announced in the Autumn Statement, effective from April this year, will see a 25% rate levied on profits generated in the UK then shifted out of the country in order to avoid paying UK taxes. This, the Revenue said today, is expected to generate a further £1.3bn.

In 2012, HMRC was given an extra £77m by the Treasury to expand its anti-avoidance and evasion work. This included £30m for transfer pricing and strengthening risk assessment across the large business sector, the Revenue said.

Financial Secretary to the Treasury David Gauke said, “We gave HMRC additional funding to challenge multinational groups to ensure the rules are followed and the right tax paid, but we are going further to ensure multinationals pay their fair share.

“The government’s new tax on profits earned in the UK but diverted abroad will combat those trying to avoid paying what is owed to the public purse.”