1. Do you think it is always possible to establish an arm’s length/ market price?
2. Would an arms’ length price be more difficult to establish in the provision of services?

According to an article in the  Financial Timesthe UK tax authority (HMRC – HM Revenue & Customs) raised £1.1bn from challenging the pricing of multinational companies’ internal deals in 2013–14 – more than twice as much as in the previous year.
The increase came as HMRC stepped up its ‘trans-fer-pricing’ investigations – scrutinizing the prices charged on transactions between different parts of the same company – following a public outcry over multinational tax planning. The Treasury has intensified action against multinationals’ tax avoidance by launching a new ‘diverted profits tax’ as well as contributing to an overhaul of the transfer-pricing rules by the OECD group of mostly wealthy nations. The transfer-pricing rules permit HMRC to adjust the profits on transactions between companies in the same corporate group where it appears that the transaction did not take place at ‘arm’s length’, on the same terms as for an unrelated company. In the year to 2014, the amount of extra tax secured from transfer-pricing inquiries aimed at large businesses more than tripled.