By Ian Findlay, industrial reporter

NCR HAS played down the significance of an audit being carried out by HM Revenue & Customs into payments made by its subsidiary in Dundee.

The department is examining transfer pricing arrangements involving the company’s financial self service division operation in the city, which employs around 1500 people and is involved in the design, development and manufacture of automated teller machines (ATMs).

Transfer pricing relates to the pricing of cross-border transactions between subsidiaries, which accounts for more than half of world trade. However, many tax authorities are known to view transfer pricing with some distrust, believing that some multinationals use the system to avoid certain taxation.

A spokesman for NCR told The Courier yesterday that its transfer pricing practices have not been audited by the Inland Revenue in the recent past and that the Inland Revenue typically only conducted such an audit once.

“This audit is routine,” said the spokesman. “We anticipate that there will be no further tax liabilities and we remain committed to the success of our operations in Dundee.”

NCR yesterday announced total revenue for its worldwide operations during the fourth quarter of last year of $1.72 billion. The figure represents a 4% drop from the corresponding period of 2004, but 3% of that has been attributed to currency fluctuations.

Income for the last quarter was, however, up to $150 million from $129 million for the fourth quarter of 2004.

The latest annual figures for the operations in Dundee, announced last week for 2004, showed that turnover during the year dropped to £64.4 million from £67.4 million the previous year.

Pre-tax units for the Gourdie and Wester Gourdie operations were also down, from £7.5 million in 2003 to £6.6 million.

However, late last year, when the company was giving assurances over its operations in Dundee, NCR said at the time the subsidiary was enjoying a record level of business.