Overseas companies targeted for underpaid tax

HMRC is taking action over the shifting of profits by foreign companies selling or operating in the UK said Pinsent Masons. It is targeting German companies for £720m in underpaid tax in the UK up 48% from £486m in 2017-18. This reflects HMRC’s concerns over where profits from the sale of German-manufactured goods in the UK are being recorded.  

HMRC is also chasing Irish companies for £826m in underpaid tax in the UK up 14% from £723m in 2017-18. This largely reflects HMRC’s current focus on the complex cross-border tax arrangements used by technology businesses. 

Further HMRC believes that US-based companies underpaid tax of £3.6bn last year although this has fallen over the past year down 23% from £4.6bn in 2017-18. This may reflect how HMRC is reaching its limit in terms of what it can do to increase its tax take from US companies within...