HM Revenue & Customs (HMRC) has published its annual statistics concerning transfer pricing (TP) and diverted profits tax (DPT) for the 2024-25 tax year, spanning from 6 April 2024 to 5 April 2025.
The latest figures show significant increases in compliance activity and tax yield related to transfer pricing, as well as developments in diverted profits tax enforcement and legislative changes.
These statistics underline the ongoing effort by HMRC to ensure that multinational groups comply with the arm’s length principle and align with international tax standards.
HMRC Publishes Annual Transfer Pricing Statistics
The HMRC annual release provides a detailed account of TP enforcement and outcomes for 2024-25.
According to official figures, the total transfer pricing yield nearly doubled to £3,387 million from the previous year’s £1,786 million. This increase reflects intensified HMRC scrutiny and targeted activity, driven in part by the recruitment of specialist staff.
Ongoing Importance of Transfer Pricing Compliance
Transfer pricing remains a central focus for HMRC’s compliance strategy. The rising yield and volume of casework are attributed to both strengthened internal capabilities and growing international pressure on base erosion and profit shifting.
HMRC continues to emphasise the necessity for businesses to maintain thorough TP documentation and implement compliant intercompany arrangements. Failure to do so can result in costly and protracted enquiries, as demonstrated by the current case settlement data.
Key Trends in Transfer Pricing Enquiries
HMRC settled 143 transfer pricing enquiry cases during the 2024-25 tax year, an increase from 128 cases in the previous period. The average duration to settle a TP enquiry rose from 33.1 months to 41 months, indicating increasing case complexity.
Advance pricing agreements (APAs), which offer tax certainty for multinational groups, saw some improvements. Twenty-six APAs were agreed in-year, with the average time to reach agreement reduced to 43.9 months from 53 months previously.
International Tax Staffing and Procedure Timeframes
As of the reporting period, HMRC employed 392 full-time equivalent staff dedicated to international tax matters, including transfer pricing.
This represents a continued investment in resource capability to address the growing workload and technical demands of TP and DPT enforcement.
The mutual agreement procedure (MAP), which resolves cross-border tax disputes, also saw increased activity. A total of 115 MAP cases were concluded, up from 86, with average resolution time dropping to 24.8 months from the prior year’s 28.8 months.
Latest Developments in Diverted Profits Tax
Diverted Profits Tax (DPT) is aimed at large multinational groups shifting profits out of the UK via artificial arrangements. DPT applies to enterprises with worldwide revenues above €750 million.
For 2024-25, HMRC reported net DPT receipts of £94 million, a slight decrease from £108 million the previous year. While DPT receipts declined, the number of notifications received by HMRC rose from 16 to 42 cases.
This suggests a broader application of the DPT regime and increased attention to potential profit diversion by affected businesses.
Final Summary
HMRC’s latest statistics for 2024-25 reveal a marked rise in transfer pricing yield, more complex enquiries, and a sustained increase in staffing for international tax compliance.
The introduction of new legislation and eventual replacement of the DPT regime reinforce the importance of timely, thorough documentation and proactive engagement with HMRC processes. As the UK tax regime develops, multinational enterprises face greater obligations to substantiate their intercompany pricing and monitor legislative reforms.
Staying informed of enforcement trends and forthcoming changes can help businesses manage compliance risks. For those seeking further details on the tax landscape, the Pie app provides curated updates on developments in international tax compliance.
