On 11 March 2026, the United Kingdom (UK) tax authority (HMRC) released the statistics for transfer pricing (TP) and diverted profits tax (DPT) for the tax year 2024/25.

Under the UK TP and DPT rules, HMRC challenges arrangements that do not allocate the right profits amount to the UK. The released statistics show interesting developments in terms of number and length of cases, yield and other aspects in relation to these challenges.

Transfer pricing enquiries

HMRC raised £3,387m in TP yield in tax year 2024/25, compared to £1,786m in tax year 2023/24. This is almost double the yield of 2023/24. It is notable that this increase in yield has occurred through only a small increase in settled cases compared to the prior year — 143 settled cases in 2024/25 compared to 128 settled cases in 2023/24.

This means that the average yield increased substantially.

The increase in yield in settled cases is indicative of continued pressure and sustained scrutiny from HMRC in the TP enquiries.  There appears to be no sign of HMRC's easing up in enquiries activity. It should be noted that the average length of an enquiry increased significantly compared to the prior year. As more complex cases will likely exceed this average, tax departments should be alert that significant resourcing and access to historical information may be required over a long period, often in a changing business.

Regarding the age of settled enquiries, the average increased from 33.1 months in 2023/24 to 41.0 months in 2024/25. As noted above, in general, TP enquires take approximately three years to complete. The latest data suggests a lengthening of timelines, consistent with an increasing proportion of complex, fact intensive and internationally coordinated cases.

From a resourcing perspective, the number of HMRC officials working on international issues involving TP and DPT remained essentially the same at 392 full-time equivalent staff (FTES) compared to 395 FTES in 2023/24. The sharp increase in yield alongside stable resourcing reinforces the view that HMRC continues to apply a "resource to risk" approach for prioritizing enquiries.

Advance Pricing Agreements and Advance Thin-Capitalisation Agreements

Advance Pricing Agreements (APAs) and Advance Thin-Capitalisation Agreements (ATCAs) are written agreements between a business and HMRC that determine the appropriate TP method to be applied to certain transactions for a set period and in advance of a tax return being made. These are important tools to providing multinational businesses with greater certainty about their tax liabilities so that they pay the right amount of tax at the right time.

In 2024/25, HMRC concluded 26 APAs, similar to 27 in 2023/24, confirming the sustained level of APA output following a sharp increase in agreements compared with earlier years. Importantly, the average time to reach an APA decreased from 53 months in 2023/24 to 43.9 months in 2024/25, indicating improved throughput and possibly reflecting the resolution of a number of long-running legacy cases that had previously inflated average completion times. In contrast to prior years, APA application volumes fell sharply; 20 applications were received in 2024/25, down from 45 applications in 2023/24. Consistent with trends in recent years, no APA applications were rejected. Although the decline may indicate some short-term volatility in the demand, it does not appear to reflect any reduction in HMRC's willingness to engage in the APA process. Indeed, this reinforces the message that HMRC remains open to APA discussions if cases are appropriately scoped and technically robust

In 2024/25 HMRC concluded 2 ATCAs, compared to 10 in 2023/24. The volume of ATCAs has been declining over time, reflecting broader structural changes in the UK's approach to interest deductibility. Notably in 2024/25, the average time to conclude an ATCA decreased sharply, from 37.3 months in 2023/24 to 21.7 months in 2024/25. Although the small number of cases concluded in the year limits the conclusions that can be drawn from this data, it suggests that more targeted ATCA cases are now progressing more quickly through the system. As HMRC has previously acknowledged, the introduction of the corporate interest restriction (CIR) rules has, in many cases, introduced mechanical limits on interest deductibility. As a result, the practical relevance of ATCAs might have diminished for some taxpayers. Nonetheless, for groups with significant or complex financing arrangements, an ATCA may still provide valuable forward-looking certainty, particularly if interactions with other jurisdictions or legacy capital structures are part of the fact pattern.

The processes involved around APAs are usually at least bilateral, and thus the time indicators may not indicate delays on the part of the UK. However, the 2024/25 statistics reinforce that APAs remain firmly part of HMRC's tax-certainty toolkit, with stable agreement volumes, reduced completion times and continued openness to engagement.

Mutual agreement procedures

A mutual agreement procedure (MAP) is included in most double-taxation agreements and allows tax administrations to resolve cases of double taxation through consultation and mutual agreement.

It remains clear that HMRC is strongly committed to the effective use of MAPs. The number of MAP cases resolved increased significantly from 62 in 2020/21 to 131 in both 2021/22 and 2022/23. Though there was a temporary decline to 86 cases resolved in 2023/24, this rebounded in the latest period, with 115 MAP cases resolved in 2024/25. Encouragingly, average resolution times have improved, falling from 28.8 months in 2023/24 to 24.8 months in 2024/25, reversing the earlier upward trend seen in 2022/23.

These statistics show that the UK resolved MAP cases in an average of 24.8 months, continuing to outperform the global average of 30.9 months. Most notably, the UK resolved 91% of TP MAP cases by fully eliminating double taxation, either through agreement with treaty partners, unilateral relief or other domestic remedies, comfortably exceeding the global average.

By making full and timely use of the MAP program, taxpayers can significantly enhance the likelihood that double taxation arising from TP adjustments is relieved in practice, rather than remaining an economic cost.

Profit diversion compliance facility

The profit diversion compliance facility (PDCF) is a cooperative compliance facility intended to encourage multinational enterprises (MNEs) to fully disclose significant tax uncertainties or inaccuracies to ensure compliance with tax law, and to work cooperatively, proactively and transparently with HMRC to resolve uncertainties and risks.

After a period of subdued new activity, the PDCF is now beginning to pick back up. In 2024/25, HMRC issued nine PDCF letters and these letters resulted in four registrations in 2024/25. Although absolute volumes remain below earlier peaks, the increase in newly admitted cases indicates a renewed focus on identifying suitable cases for the facility. HMRC has previously explained that reduced issuance of PDCF letters in earlier years reflected a deliberate reallocation of resources toward progressing and concluding cases already within the facility. The latest statistics confirm that this phase is now transitioning into a renewed cycle of case identification and engagement, with more PDCF letters being issued.

Notably, resolution activity remained strong. In 2024/25, 17 PDCF cases were resolved, which is only slightly below the 19 resolved in 2023/24. This reflects HMRC's continued emphasis on progressing and concluding existing cases through the facility.

It remains encouraging that the PDCF continues to offer significantly faster resolution than traditional TP enquiries. Resolved cases have completed the PDCF process in an average of 23 months from the initial registration meeting to receiving a decision from HMRC, and 98% of final proposals have been accepted.

HMRC estimates that the PDCF has secured more than £872m of additional revenue through resolution proposals and changes in taxpayer behavior since its introduction in January 2019. HMRC also notes that it continues to investigate multinationals that receive PDCF nudge letters but fail to register, reinforcing the importance of early and considered engagement where potential profit diversion risks exist.

Taken together, the statistics suggest that HMRC continues to view PDCF as an effective means of bringing complex TP and profit diversion cases to resolution, and taxpayers facing material exposure should consider whether a PDCF-style cooperative approach may offer a more efficient path to settlement than a prolonged enquiry, particularly if there is a willingness to engage early and transparently.

Diverted profits tax

Diverted profits tax (DPT) is a tax on profits diverted from the UK to lower tax jurisdictions through the use of contrived arrangements. The net amount of DPT that HMRC received in 2024/25 fell to £94m, down from £108m in 2023/24. The net amount is the amount of DPT received from charging and supplementary notices and not repaid, according to the report.

From the introduction of DPT through to 31 March 2025, HMRC has secured more than £10.5b in additional tax as a result of DPT. As of the end of March 2025, HMRC was carrying out approximately 53 reviews into multinationals with arrangements to divert profits, including cases registered under the PDCF, with £3.5b of tax under consideration across these ongoing reviews.

Therefore, even though the net amount of DPT that HMRC received has trended downward, MNEs should still take care to carefully consider their exposure to DPT, particularly given that DPT needs to be paid in advance. 

Importantly, although DPT receipts have fallen, the regime's leverage effect remains central to HMRC's international tax strategy. This is reflected in the government's announcement that DPT will be repealed and replaced by the unassessed transfer pricing profits (UTPP) rules, which will apply to accounting periods beginning on or after 1 January 2026. The UTPP charge retains the core policy intent of DPT, counteracting profit diversion through non-arm's-length arrangements, but brings the charge within the corporation tax framework, rather than operating as a standalone tax. Further, the UTPP charge is expected to operate with a lower threshold for engagement than DPT, meaning a broader range of TP and profit allocation issues may fall within scope.

What this all means

The latest statistics highlight the continued intensity of HMRC's focus on transfer pricing and profit diversion, with enquiries that remain value-dense and demanding in terms of data, governance and evidence. Though routes such as the PDCF, APAs, ATCAs and MAP offer opportunities for early engagement, certainty and relief from double taxation, outcomes under these mechanisms must be underpinned by robust arm's-length analysis. As the UK transitions from the DPT to the UTPP charge, the underlying policy emphasis on countering profit diversion and driving behavioral change remains unchanged. Against this backdrop, proactive risk assessment, high-quality documentation and considered use of cooperative compliance tools will be critical to managing exposure and avoiding protracted disputes.