INTM489854 | Diverted Profits Tax: customer engagement with HMRC: seeking information from other sources

As described at INTM489833, HMRC will carry out an initial risk review of companies it considers may fall within the scope of DPT. This will form part of a wider risk assessment of transfer pricing and other international risks using information already held by the department and public source information. It will also consider any information and analysis provided by the company as a result of real time engagement. HMRC will not usually request information at this stage.

Public source information will include published accounts and other public documents (for example US filings such as the SEC 10-K) which can contain useful information about the group’s structure and the level of its sales and profits in particular markets. Typically a group filing these will not go down to the level of individual countries outside the very largest markets for the group but information about, for example, the Europe, Middle East and Africa (EMEA) region might help HMRC to make informed estimates of UK activity. Also the accounts of non-UK group companies in regional hub jurisdictions can be read using a commercial database and might provide a useful indication of whether and to what extent any profits have been diverted from the UK.

The Diverted Profits Team will assist with this work when they carry out their review. The Diverted Profits Team’s review will seek to identify all tax risks that arise from transactions and structures. This holistic approach should also be adopted by the CCM and other case workers towards information obtained from the customer and other sources.

HMRC’s personal information charter sets out the standards you can expect from HMRC when we request or hold information about customers during their dealings with us.