As reported in The Times this week, HMRC is cracking down on international businesses diverting profits to lower-tax jurisdictions and has estimated that £9.3 billion in revenue has been lost through transfer pricing strategies. While this is unwelcome news for international businesses, there is an opportunity to re-coup some of this cost through a reclaim on customs duty paid on the diverted profits.
So far, additional top-up payments of around £70 million have been made to HMRC in response to a voluntary scheme to help business avoid being hit with penalties under HMRC’s diverted profits tax, which is charged at a rate of 31%.
Adam Wood, Head of Commercial at Barbourne Brook commented:
“The reclaim opportunity on voluntary payments alone could easily amount to £14m, so when you also take into account the additional £9 billion+ that could potentially be investigated by HMRC there is an enormous amount of customs duty potentially being overpaid by international businesses.
This opportunity can easily be overlooked, as customs duty and tax are usually handled by different departments with little visibility of one another’s activities – especially those done retrospectively on an ad-hoc basis.”
Contact Us
If you would like to discuss a potential reclaim opportunity with Adam or one of the Barbourne Brook consultancy team, call 01905 914031 or email [email protected] for a no obligation conversation.
About Barbourne Brook
Barbourne Brook are a proactive team of customs duty planning experts with a wealth of knowledge and insight in the customs sphere, offering scalable solutions backed by industry-leading technology.
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21 Sansome Street
Worcester
WR1 1UH
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