PTP's Tax Tip No.4 ' Are there transfer pricing issues?
Q: My company, in which I'm the sole shareholder, has a turnover of £40m and I employ 270 people. My wife's company, in which my wife and I own 50% of the shares each uses a spare office in my head office. Her phone calls are put through by our receptionist and, other than a couple of sheets of headed paper, that's all she takes. I've never charged her for anything. Do I have transfer pricing issues?
A: Yes. Five of them! The office rent, phone charges, use of reception staff, use of stationery and use of your company's branding via the headed paper.