Profit diversion compliance facility guidance published

Released 10 January 2019

HMRC have published online guidance to help companies find out about and use the profits diversion compliance facility to make disclosures of outstanding liabilities for profit diversion.

The ‘diverted profits tax’ was introduced by Finance Act 2015 in an attempt to address large businesses structuring themselves in such a way as to avoid UK taxation. Broadly, HMRC may seek to impose a tax charge of 25% of the amount of taxable diverted profits specified in a notice plus interest, where applicable. The charge only applies where the total annual sales by a company, or its connected companies, exceed £10m.

The guidance explains:

how to use the profit diversion compliance facility;

what should be included in a disclosure report; and

HMRC indicators of profit diversion risk.

View the guidance.

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