INTM489882 | Diverted Profits Tax: notification, charging and payment: introduction – what companies need to do

The purpose of the notification requirement is to alert HMRC to situations where there is a significant likelihood that DPT is chargeable and HMRC does not already have a detailed understanding of these arrangements. The onus is on the company to consider whether its provisions and arrangements fall within the scope of DPT and, where they do, to notify HMRC of this. No notification is needed where it is reasonable to assume that the company has already provided HMRC with sufficient information to allow a decision to be made as to whether a preliminary notice should be issued. However, a company cannot rely on an intention to make adjustments under Part 4 TIOPA 2010 to avoid the requirement to notify.

The focus of DPT and the Diverted Profits Team is on those companies that use contrived arrangements designed to erode the UK tax base. There is no need for companies to notify structures or transactions which are clearly outside that scope. So companies that have not put arrangements in place aimed either at avoiding the creation of a UK permanent establishment or involving arrangements or entities that lack economic substance (as described above and illustrated in this guidance) do not need to make “protective” notifications.