Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Profits definition

What does Profits mean? Profits describes the net surplus generated by a business or asset after deducting relevant costs, used to assess performance, tax liabilities, distributions and damages. The precise meaning is context‑specific. For corporation tax in the UK and Ireland, legislation provides that a company’s profits include both income and chargeable gains (capital gains), not just trading results. Key distinctions include: - Accounting profit: measured under applicable GAAP. - Taxable profits: accounting profit adjusted by statute (for example, disallowables, capital allowances, losses and group relief). - Distributable profits: profits available for lawful dividends under companies legislation (UK Companies Act 2006, Irish Companies Act 2014), broadly the company’s...

UK Diverted Profits Tax (DPT): notifications, preliminary/charging notices, review and appeal process, interest and penalties, PDCF and treaty interaction—archived guidance following repeal from 2026

Published by a LexisNexis Tax expert

Practice notes

ARCHIVED :

This archived Practice Note summarises the Diverted Profits Tax (DPT) regime, which was repealed for accounting periods beginning on or after 1 January 2026. DPT applied to periods starting between 1 April 2015 and 31 December 2025. It has been replaced by the unassessed transfer pricing profits (UTPP) Rules set out in Schedule 5 to the Finance Act 2026. This Practice Note is not maintained and is provided for background only.

The DPT provisions are found in Part 3 and Schedule 16 to the Finance Act 2015. The legislation introduced a tax designed to deter avoidance of UK tax by multinational groups operating in the UK. DPT features distinct rules on notification, assessment and payment, and, unlike corporation tax, it is not self-assessed. This Practice Note considers compliance and administration issues arising from the regime, including:

company notification Requirements
the preliminary notice
the charging notice
reviews, amending notices, supplementary charging notices and appeals
interest and penalties
clearances
interaction of DPT with tax treaties

For a fuller discussion of the two circumstances...

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Penny Simmons

Pinsent Masons

Penny is a Legal Director in the tax team at Pinsent Masons, specialising in tax risk management for large corporates. Penny also provides technical assistance to clients and members of the team on all areas of corporate tax including corporate finance and M&A work, private equity, employment tax and property tax....

Web page updated on 22/05/2026

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