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HMRC internal manual

Compliance Handbook

Penalties for failure to pay on time: rules for specific taxes: Diverted Profits Tax (DPT): overview

Diverted Profits Tax (DPT) is payable by large business groups (typically multinational enterprises) that use contrived arrangements to circumvent rules on permanent establishment and transfer pricing.

DPT is brought into charge by a designated HMRC officer issuing a charge notice.

The penalty rules for failure to pay DPT on time start on 1 April 2015 and apply to the failure to make payments of DPT in full and on time.

To decide whether a business is liable to a penalty you need to know the DPT charge date, the payment date and the penalty date.

The charge date is the date the charge notice is issued by the HMRC officer.

Once a charge notice is issued, it must be paid within 30 days. The 30th day is known as the payment date.

The penalty date is the 31st day after the charge date.

A person is liable to

  • an initial penalty if an amount of DPT is unpaid at the penalty date, and
  • two further penalties if an amount remains unpaid 5 and 11 months after the penalty date.