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New shake up proposed on transfer pricing and clearances

HM REVENUE AND CUSTOMS News Release (NAT 40/07) issued by The Government News Network on 20 June 2007

Next stage of HMRC's Review of Links with Large Business gets underway

Two consultation documents aimed at enhancing the way HM Revenue & Customs (HMRC) deals with transfer pricing enquiries and rulings and clearances, were published today.

Consultation document "HMRC approach to transfer pricing for large business" looks at:
* ways in which HMRC can better target its transfer pricing enquiries and focus on the right issues;
* resolving transfer pricing enquiries faster, with an 18 month completion timetable as the norm.
* devoting more resources to transfer pricing with more specialist input

Welcoming the announcements, the Paymaster General, the Right Hon. Dawn Primarolo MP said:

"Publishing these two consultations today marks an important practical next step in providing business with certainty on specific tax issues, by taking forward the recommendations of Sir David Varney's 2006 Review of Links with Large Business.

Ensuring the effectiveness and cost-efficiency of the rules in these complex areas of Transfer Pricing and Clearances is an important shared objective for both business and Government. Working together is essential to achieving that joint objective".

The other document, "Giving Certainty to Business through Rulings and Clearances" considers:

* giving businesses who seek HMRC's view on significant issues both pre and post transaction, a binding view within 28 days; and
* providing binding rulings across all relevant taxes for businesses that provide clear plans for investment.

Dave Hartnett, Director General Business Strategy, said:

"We are moving from an ad hoc approach on these issues to a more project managed system - businesses want to have greater certainly earlier and this is what we are offering them. Gone will be the days when a decade can pass before issues are resolved around transfer pricing.

Last November we promised to consult on these issues during the summer and have done so. We want to work closely with business, agents and representative bodies to get these proposals right. Now we need business to play its part and help build a constructive and transparent relationship with HMRC."

Copies of the consultations can be viewed at:
http://staging.hmce.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&columns=1&id=CURRENTCONSULTATIONS

Notes for Editors

1. The 2006 Review of Links with Large Business set out the outcomes that business and HMRC wanted to see from a relationship based on trust and transparency and a shared commitment to efficient and effective collection of the right tax at the right time.

2. The report '2006 Review of Links with Large Business' published in November 2006 outlined 14 key proposals that would together deliver these outcomes http://www.hmrc.gov.uk/large-business/review-outcomes.htm. At Budget 2007, HMRC published an outline delivery plan alongside the actual delivery of some of the proposals http://www.hmrc.gov.uk/large-business/review-2007.htm.

3. All responses on "Giving certainty to business through Rulings and Clearances" should be sent by 3 September 2007 to Jane.Webb@hmrc.gsi.gov.uk.

4. All responses to "HMRC Approach to transfer pricing for large business" should be sent by 15 September 2007 to roy.warden@hmrc.gsi.gov.uk

Issued by HM Revenue & Customs Press Office
Website: http://www.hmrc.gov.uk