UK

How clear is your Transfer Pricing documentation?

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Until recently I was a Senior Transfer Pricing Specialist with HM Revenue & Customs. I have HMRC TP risk-assessing and case-working experience for most business sectors and transaction types and was a member of HMRC’s TP Governance Panel, which has the final say on most TP enquiries.

I have now decided to specialise in helping MNEs and their advisers prepare their “final” TP documentation for HMRC eyes.

You may think your TP Documentation is clear and complete; but HMRC may think otherwise. Many TP enquiries are opened or extended by HMRC because the full facts and circumstances of the business and its transfer pricing are absent from or not clearly presented in the documents provided. Ironically, on establishing the facts it often becomes clear to HMRC that the pricing is actually at arm’s length and the enquiry can be closed without adjustment. Unfortunately, considerable time and money will have been expended on the enquiry in the meantime.

Such enquiries can be avoided or cut short.

I can “sense-check” your TP documentation; issues that might otherwise trigger “TP risk” alarm bells within HMRC will be identified and can be corrected, clarified or expanded as required, before submission to HMRC, to better demonstrate your principled and objective approach to achieving the appropriate arm’s length pricing.

To find out how I can help you please use the “contact me” tab above or email me directly.

Gordon McLeman 08 December 2017

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UK Royalties Withholding Tax – Consultation

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Source: HMRC Press Release, 1 December 2017

This consultation relates to the circumstances in which royalties and other types of payment made to connected persons not resident in the UK have a liability to income tax.

The UK government will introduce legislation in Finance Bill 2018-19 that broadens the circumstances in which certain payments made to non-UK residents have a liability to income tax.

These changes will have effect from April 2019. The consultation focuses on the design of that legislation.

The government welcomes comments from those who would be affected by these changes, including companies, advisors and representative bodies.

The consultation runs from 1 December 2017 to 23 February 2018.

Details of the Consultation here

 

UK Budget 2017: Tech giants targeted over royalties

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Source: bbc.co.uk 23 November 2017

The UK government is taking steps to increase the tax it collects from firms doing business online. Rules to prevent online sellers avoiding VAT have also been tightened.

From April 2019, technology groups such as Google and Apple will pay a new withholding tax on the royalty payments they make to their subsidiaries in low-tax jurisdictions.

HMRC will also hold online marketplaces such as eBay and Amazon responsible if sellers using their platforms fail to pay Value Added Tax on their sales.

Chancellor Philip Hammond said: “Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed and some of those relate to UK sales.

“This does not solve the problem, but it does send a signal of our determination and we will continue work in the international arena to find a sustainable and fair long-term solution.”

Source article here

 

“Tax break could lead to rush of deals in North Sea”

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Source: Aberdeen Journals Ltd 23 November 2017

“A ground-breaking new tax break for the oil sector will revitalise the North Sea and pave the way for a flurry of deals, industry experts said yesterday.

They said the UK Government’s decision to let firms transfer tax credits would attract fresh investment to the basin and prolong production from mature fields.

Derek Leith, head of oil and gas tax at EY, said the changes had the potential to “revitalise” the UK oil and gas industry and Alex Kemp, professor of petroleum economics at Aberdeen University, said the reforms were to “everyone’s advantage”, including the Treasury, as “more transactions mean more oil will be recovered”.”

Source article here

 

HMRC’s tax gap at lowest level in 10 years

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Source: economia.icaew.com 27 October 2017

The latest official statistics indicate that the UK tax gap fell to a record low of 6% in the 2015/16 tax year.

Financial Secretary to the Treasury and Paymaster General, Mel Stride, said that these statistics indicate important strides in “tackling avoidance, evasion and non-compliance”, but that there is still more work to be done.

Jim Harra, Director General, Customer Strategy and Tax Design at HMRC said: “HMRC’s online tax accounts and use of data increasingly help people get their tax right and prevent mistakes and fraud. This enables us to focus on tackling those who deliberately pay less than they owe. Measuring the tax gap gives us vital insights into where to direct our efforts, and tells us that our strategy is succeeding.”

Source article here