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HMRC internal manual

International Manual

Transfer pricing: methodologies: Advance Pricing Agreements: revocation and penalties

Nullifying and revoking APAs and penalties

In accordance with TIOPA10/S225, an APA may be revoked by HMRC in accordance with its terms, where the business does not comply with the terms and conditions of the agreement, or where the identified critical assumptions cease to be valid. In practice, when considering nullifying or cancelling a bilateral APA HMRC will consult with the business and with the Competent Authority of the treaty partner involved. In some cases, a change in the agreement may be possible - see also INTM422120 below.

Where false or misleading information is supplied fraudulently, or negligently, in connection with an application for, or in the process of monitoring, an APA, penalties may be applied, and the APA might be nullified (see TIOPA10/S226 and TIOPA10/S227).

In accordance with existing appeal procedures, the business has the right to appeal against the amount of any additions to profits arising as a result of the revocation or cancellation of an APA.