Focus on transfer pricing likely to raise more than £3bn

HMRC carried out 362 reviews into businesses’ transfer pricing practices last year with the tax under dispute rising to £3.8bn according to Pinsent Masons.

The figure rose by 60% despite a 10% fall in the number of reviews in 2015-16 compared with the previous year when HMRC undertook 415. The £3.8bn is an estimate of the maximum potential additional tax liability across all enquiries undertaken by HRMC’s large business directorate. The amount due tends to drop after individual investigations.

Heather Self partner at Pinsent Masons said transfer pricing remained an area ‘of intense focus’ for HMRC. She said the department had ‘been investing in specialists on the issue and businesses need to ensure that compliance procedures surrounding the process are robust’.

Further due to the tax HMRC believes it could be owed Ms Self said there was likely to be increased activity in...