The FTSE 100 company reported in its interim results for the six months to 31 December 2016 released on 26 January 2017 that it had been discussing its transfer pricing position and related issues with HMRC, and that it had entered into a process of collaborative working to seek clarity on those issues. It says those discussions are ongoing.

However, Diageo says it has now learned that HMRC intends to issue preliminary notices of assessment under the DPT regime, which came into effect in April 2015.

The company’s understanding is that this will require Diageo to pay additional tax and interest of approximately £107m in aggregate for the financial years ended 30 June 2015 and 30 June 2016.

Diageo has given no details of the disputed tax, but reports suggest it could relate to profits that have been moved between the UK and the Netherlands, where Diageo employs 220 people.

In a statement to the London stock exchange, the company said: ‘Diageo does not believe that it falls within the scope of the new DPT regime.

‘Accordingly, Diageo will challenge the assessments when they are received. In order to do this, it will be necessary to pay the full amount assessed up front and then continue to work to resolve this matter with HMRC.

‘The payment of this sum is not a reflection of Diageo’s view on the merits of the case and, based on its current assessment, Diageo considers no provision is required in relation to DPT.

‘This issue does not change Diageo’s expectation that the tax rate before exceptional items for the year ending 30 June 2017 will be approximately 21%.’

DPT was introduced by the former chancellor, George Osborne, and came into law in April 2015. It imposes a 25% charge on taxable profits that have been diverted from the UK.