Glencore is disputing a £264 million tax demand from HM Revenue & Customs (HMRC), arguing that the UK tax authority issued the claim too late to be legally enforceable. The case, currently before a court in London, focuses on HMRC’s charges related to the diverted profits tax (DPT) for the years 2019 and 2020. Introduced ten years ago to deter multinational companies from shifting profits to lower-tax jurisdictions, the DPT is at the center of a broader tax dispute between Glencore and HMRC involving approximately £1.6 billion.

HMRC alleges that Glencore’s UK trading division entered into arrangements with its Swiss parent company that effectively transferred profits out of the UK. According to the tax authority, this arrangement allowed profits to be routed to Switzerland, where corporate tax rates are lower, thereby artificially reducing taxable income in the UK. The wider dispute covers transactions made by Glencore between 2007 and 2023, with the current case focusing specifically on whether HMRC met the deadlines for issuing preliminary notices for 2019 and 2020.

Typically, HMRC has two and a half years from the end of an accounting period to issue a DPT notice. However, HMRC contends that a four-year time limit applies in this instance. This extended deadline is triggered if a company fails to submit a formal disclosure to HMRC about potentially aggressive cross-border tax arrangements. HMRC argues that Glencore did not provide the necessary disclosure forms, thereby activating the longer period to issue tax assessments.

Glencore counters this by pointing to correspondence from HMRC in which the tax authority indicated Glencore was not legally required to file such notifications because HMRC already possessed sufficient information. Represented by Sam Grodzinski KC, Glencore asserts that relying on the four-year extension contradicts the legislation that established the diverted profits tax. The company is seeking a judicial ruling declaring the £113 million demand for 2019 and the £151 million demand for 2020 invalid and has asked for a refund of the amounts paid.

HMRC, represented by Mark Fell KC, described Glencore’s arguments as “inherently implausible,” stating that the company’s interpretation involves reading provisions into the law that do not exist. The tax authority maintained that a lack of notification obligation does not exempt a company from DPT liability.

Glencore disclosed in its most recent half-year financial statements that it intends to challenge the broader £1.6 billion tax assessment through arbitration “in the near future.” The company declined to offer additional comments on the ongoing litigation.