15 January 2019
The PDCF is stated to be targeted at taxpayers who have adopted cross-border arrangements which divert profits from the UK based upon inaccurate facts or the incorrect application of OECD transfer pricing guidelines. Those taxpayers should, HMRC believes, be subject to the diverted profits tax and civil and criminal penalties.
Under the PDCF, HMRC is offering taxpayers a deal: if you provide full disclosure of your arrangements, calculate what the correct tax result should have been and pay the tax in full, then HMRC will spare you the time and cost of a full enquiry and any penalties should be at the lower level applicable to a voluntary disclosure.
This briefing considers three critical questions. Who is HMRC really targeting with the PDCF? Which taxpayers should be using it? And how should they go about doing so?