Profit Diversion Compliance Facility ‚ HMRC letters to multinational enterprises - an update for CIOT members

This update provides some background to HMRC’s Profit Diversion Compliance Facility (PDCF) and guidance to help members provide advice on the most appropriate way to respond if a business receives a letter from HMRC suggesting that they review their cross border arrangements. We consulted HMRC to check that this update accurately reflects their position.   

The PDCF was launched in January 2019 and remains open and available to all multinational enterprises (MNEs). The facility is part of HMRC’s drive to tackle profit diversion by MNEs. HMRC is running a programme of identifying and writing to specific MNEs they believe could be diverting profits away from the UK. This programme paused due to COVID-19 in the first part of the year, but has re-started with a batch of letters sent out in September 2020 and a further batch expected before the end of the year.