Register to get free articles
Want unlimited access? View Plans
Already have an account? Sign in
US companies underpaid £5.6bn in UK tax last year, HMRC believes, marking a 14% rise against the amount underpaid the previous year, according to UHY Hacker Young.
The firm said US companies now account for 48.6% of suspected underpaid tax from all foreign companies operating in the UK, up from 45.2% the prior year..
HMRC suspects tax underpaid by all foreign companies hit £11.5bn in total last year, 6.9% higher than in 2021/22 when £10.8bn was suspected of being underpaid.
Some US multinationals, including major US tech businesses, were accused of diverting their earnings from the UK to lower-tax jurisdictions to reduce their UK tax bills through transfer pricing.
Transfer pricing is when one company in a group pays another overseas company in the same group for goods or services. However, some US companies have been accused of using this system “too aggressively”.
Andrew Snowdon, partner and head of Tax at UHY Hacker Young says: “Global tax authorities are becoming even more determined to claim all the tax owed from large multinationals. It is often pointed out that US tech companies sometimes pay a much smaller amount of tax than some would expect.
“Efforts are being made globally to ensure that companies pay an appropriate amount of tax in the countries where their sales are made. Several likely rule changes in the imminent future would make it even harder to divert earnings overseas and subsequently more difficult to underpay tax.”
