International review for May 2019

UK’s profit diversion compliance facility

As explained in my international review for January HMRC has introduced a profit diversion compliance facility (PDCF) to encourage taxpayers not already under investigation to review and update their transfer pricing policies and international arrangements. Some taxpayers considered ‘high risk’ received a ‘nudge’ letter encouraging them to register for the PDCF or risk an HMRC investigation but others can expect to be investigated without being nudged first.

HMRC’s first batch of ‘nudge’ letters was issued at the end of January and allowed a 90 day grace period before HMRC may investigate. This grace period has therefore recently expired and we understand that a large proportion of the 20 plus multinational groups (MNEs) that received a nudge in January are choosing to register.   Whilst there are...