Diverted profits tax
Diverted profits tax rate:
|From 1 April 2015||25%|
Diverted profits tax applies to large multinationals who enter into contrived arrangements to create ‘diverted profits' to avoid a UK taxable presence on their business activities. Further, the tax also applies where companies use transactions or entities lacking economic substance to create a UK tax advantage. This applies to those companies who have UK customers in excess of £10million but no UK taxable presence.
The diverted profits tax is expected to raise £1.4 billion pounds for the British government by 2020, according to HMRC's summary of impacts document published at the 2014 Autumn Statement.