In response to the Chancellor's Autumn Statement announcement, Martin Lambert, Head of International Large Corporate Tax at business and financial adviser Grant Thornton UK LLP, comments on the introduction of a new Diverted Profits Tax:
"The Chancellor announced the introduction of a new Diverted Profits Tax to counter the use of aggressive tax planning to avoid paying tax in the UK. The Diverted Profits Tax will be applied at a rate of 25% from 1 April 2015. The expected revenues from this tax, which the Government have disclosed as falling under the BEPS project, are £200m per annum revenue over the next 5 years.
"This tax rate, which at 25% is 5% higher the general corporation tax rate which will apply at the time the rules come in to place, feels like an additional penalty for groups that are not complying with the Government’s principle of fairness.
"We await further details as to how this tax will be administered and what additional evidence groups will be required to support their compliance with these rules. We understand that further details will be published later this month."