They point to Diageo, which agreed in July to pay an extra £190 million in conventional corporation tax in order for HM Revenue & Customs to return £107 million it had paid previously in diverted profits tax.
Other as yet unidentified multinationals are also agreeing larger corporation tax payments to avoid the embarrassment and reputational damage of being seen as paying DPT, a tax introduced in 2015 to crack down on the most egregious forms of tax avoidance.
Last year Diageo, which operates in 180 countries and makes Guinness and Gordon’s Gin, was one of the first companies to admit that it was being asked to pay diverted profits tax, revealing that it had paid up despite challenging the demand.
The sum will now be paid back by the taxman, but in exchange Diageo has agreed to pay an extra £143 million of corporation tax in respect of the three years to June 2017 and, using the same approach, has earmarked an extra £47 million that it will pay for this year.
DPT paid over how many years? Corporation tax paid over how many years?
Is this a net gain to the Treasury or not?