Tulip Siddiq – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Tulip Siddiq on 2016-05-06.

To ask Mr Chancellor of the Exchequer, how much was raised by the diverted profits tax in 2015-16.

Mr David Gauke

The Diverted Profits Tax is designed to counteract contrived arrangements used to avoid tax in the UK, and incentivise businesses to change their behaviour and pay tax on profits from economic activities in the UK. The Office for Budget Responsibility’s (OBR) recent assessment at Budget 2016 is that overall yield (including Corporation Tax from behavioural change) is expected to be close to that originally scored.

The OBR noted on page 122 of its “Economic and fiscal outlook” March 2016: “Our forecast assumes that overall yield from the measure will be close to that originally scored, but we now expect that around two-thirds of the yield will come through higher Corporation Tax payments (as firms restructure their tax affairs) rather than via the diverted profits tax itself.” This is available at: http://cdn.budgetresponsibility.org.uk/March2016EFO.pdf.