UK and International Tax news

HMRC Publishes TP and DPT Statistics For 2024/25

Wednesday 18th March 2026

HMRC has recently published 2024/25 statistics in respect of Transfer Pricing and Diverted Profits Tax yields and related information.

The UK’s transfer pricing rules set out how transactions between connected parties are priced for tax purposes and include transactions between companies in the same group. The rules are designed to ensure that profits are taxed in accordance with the internationally recognised arm’s length principle.

HMRC challenges arrangements that do not allocate arm’s length profits to the UK. In the years 2019/20 to 2024/25 it secured £11.906bn of additional tax by challenging the transfer pricing arrangements of multinationals, with £3.37bn in 2024/25, up from £1.786bn raised in 2023/24.

The transfer pricing yield figures include additional tax revenue from enquiries [real time interventions], Advance Pricing Agreements, Advance Thin Capitalisation Agreements, and transfer pricing Mutual Agreement Procedure cases.

The number of enquiry cases settled from 2019/20 to 2024/25 has averaged 141 per year, with the average time taken to settle cases of 35 months.

In 2024/25 there were 392 (395 in 2023/24) FTE staff numbers working on international tax issues, including transfer pricing, DPT, CFC and cross border debt.

In 2024/25 HMRC agreed 26 APAs (27 in 2023/24), with the average time taken to reach APA agreement of 43.9 months, down from 53 months in 2023/24.

The number of ATCAs agreed reduced from 10 in 2023/24 to 2 in 2024/25.  The average time taken to reach ATCA agreement reduced from 37 months in 2023/24 to 22 months in 2024/25.

The number of MAP cases resolved increased from 86 in 2023/24 to 115 in 2024/25, with the average time taken to resolve cases reducing from 2023/24 to 29 months to 25 months in 2024/25.

Net DPT yield averaged £101m annually over the period 2019/20 to 2024/25 with £94m charged in 2024/25.  Additional amounts of corporation tax resulting from TP settled investigations into diverted profits averaged £1.003bn annually with £1.863bn in 2024/25.

Generally, companies must notify HMRC within three months from the end of the relevant accounting period if they have arrangements that potentially fall within the scope of the DPT legislation, subject to limited statutory exceptions. HMRC then has two years to investigate to determine whether it is reasonable to issue a DPT preliminary notice. Any DPT is payable within 30 days.

The number of DPT notifications received by HMRC increased from 16 in 2023/24 to 42 in 2024/25.

HMRC launched its Profit Diversion Compliance Facility in January 2019 which was designed to encourage MNEs with arrangements that might fall within its scope to review the design and implementation of their TP policies, to change them if appropriate and to use the facility to put forward a report with proposals to pay any additional tax, interest and penalties.

HMRC is currently carrying out 53 investigations into MNEs with arrangements to divert profits, including those registered under the PDCF. The total amount of tax under consideration in these cases was £3.5bn as at the end of March 2025.

HMRC has said that it is litigating various international tax risk disputes where the business was not prepared to change their arrangements and pay additional CT.  Where HMRC has major concerns about the way that arrangements to divert profits have been implemented, and/or suspicions that they have been misled, references to the Fraud Investigation Service are made. There are a number of large businesses under civil or criminal investigation with HMRC’s Fraud Investigation Service.

HMRC is continuing to explore with professional bodies, large firms of advisers and other tax authorities how to improve the quality of tax advice provided by these firms and how to discourage tax avoidance by large businesses and wealthy individuals. HMRC is taking a number of actions under the Review of Tax Admin for Large Businesses in order to improve international tax compliance.  This includes the TP Guidelines for Compliance published in September 2024.

If you would like further information on the above, please contact Keith Rushen on 0207 486 2378.

 

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