HM Revenue and Customs is launching a crackdown on international firms attempting to dodge the Diverted Profits Tax (DPT). It has offered an amnesty via its 'profit diversion compliance facility' to companies that are liable for the tax to pay up now or face not only the tax itself, but a large penalty charge of up to 30% of what they owe.
The news has been welcomed by the Chartered Institute of Taxation (CIOT), but the industry body said the very need for such a facility to secure the money that is owed indicated the tax system is under stress.
Chair of the CIOT’s Technical Committee Glyn Fullelove said, "The DPT has come a long way from affecting ‘only a handful’ of companies, which was what was expected when it was first announced." He added that the complexity involved is now so great that corporate taxpayers "will feel they have to commission a detailed audit of the return from a ‘big four’ accountancy firm, or similar provider, before submission, to assure themselves it is correct."