Is an SME really exempt from the ‘Arms Length’ inter company pricing? 2

Stress business woman

You might think you can charge related companies whatever you want, but is that true?

First a quick lesson in Transfer/Internal Pricing ….

SME’s do have tax exemptions….

There’s an exemption that will apply for most small and medium sized enterprises. The conditions attached to this exemption can be found in HMRC’s International Manual.

A business is a ‘small’ enterprise if it has no more than 50 staff and either an annual turnover or balance sheet total of less than €10 million.

A business is a ‘medium sized’ enterprise if it has no more than 250 staff and either an annual turnover of less than €50 million or a balance sheet total of less than €43 million.

There are some exceptions:

  • Transactions with Parties in Non Qualifying territories
  • Where HMRC have issued a notice to Medium Sized enterprise
  • Election to remain subject to transfer pricing rules
  • Patent Box

 

steve@bicknells.net