Asked about UK transfer pricing rules, documentation, or HMRC compliance.
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Accountant-reviewed. Reviewed by James Power on Jun 3, 2026. Review does not create a client relationship and is not a guarantee for any specific taxpayer or transaction.
Accountant-reviewed
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Legislation
TIOPA 2010 Part 4; SI 2023/818TIOPA 2010
Master File
OECD format; available within 30 days of HMRC requestSI 2023/818
Local File
OECD format; available within 30 daysSI 2023/818
CbCR threshold
Group revenue ≥ EUR 750mTIOPA 2010 s.286
CbCR filing deadline
12 months after end of reporting periodTIOPA 2010
Criteria
Turnover < £10m AND < 50 employees AND assets < £5mTIOPA s.166
Medium exemption
< 250 employees, turnover < £36m or assets < £18m (unless tax haven)TIOPA
Failure to keep TP records
Up to £3,000 per failure per return periodFA 2007 Sch.24
Careless inaccuracy
0-30% of taxFA 2007 Sch.24
Deliberate inaccuracy
20-70% of taxFA 2007 Sch.24
Deliberate and concealed
30-100% of taxFA 2007 Sch.24
HMRC fees
No fees chargedTIOPA ss.218-230
Duration
3-5 years prospective (rollback possible)TIOPA
Low-value services safe harbour
Cost-plus 5% acceptedOECD Guidelines
Rendered from the facts database · facts last reviewed Jun 3, 2026. General reference only — confirm with a qualified professional before acting.
Year applicability: Rules in this skill apply across 2024-25, 2025-26, and 2026-27 unless a specific section flags a year-dated change. The pack is read alongside the rate-bearing skills (
uk-income-tax-sa100,uk-national-insurance,uk-dividends, etc.) which carry full 3-year tables.
Reviewed against the cited tax authorities by James Power on 2026-06-03. Items flagged for further clarification are tracked separately and excluded here. This block is generated from verified
skill_facts— edit the facts, not the prose.
Section 1 -- Quick Reference
| Field | Value |
|---|---|
| Country | United Kingdom |
| Tax authority | HM Revenue & Customs (HMRC) |
| Key TP legislation | Part 4, Taxation (International and Other Provisions) Act 2010 (TIOPA 2010) |
| Documentation regulations | Transfer Pricing Records Regulations 2023 (SI 2023/818) |
| OECD member? | Yes |
| BEPS signatory? | Yes |
| Effective date (documentation regs) | Corporation Tax: accounting periods beginning on/after 1 April 2023; Income Tax: from 2024-25 |
| Currency | GBP |
| Documentation language | English |
| Skill version | 1.0 |
2.1 Master File
| Item | Detail |
|---|---|
| Required? | Yes, for in-scope UK entities (MNEs meeting CbCR threshold with material controlled transactions) |
| Format | OECD Annex I to Chapter V of TP Guidelines (2022 edition) |
| Filing | Not filed; must be available on HMRC request within 30 days |
| Threshold | Part of a multinational group meeting the EUR 750m CbCR threshold |
2.2 Local File
| Item | Detail |
|---|---|
| Required? | Yes, for in-scope UK entities with material controlled transactions |
| Format | OECD Annex II to Chapter V of TP Guidelines (2022 edition) |
| Filing | Not filed; available on HMRC request within 30 days |
| Supplementary | Summary Audit Trail (SAT) -- subject to further consultation |
Even if exempt from specified records, general TP documentation must still demonstrate arm's length compliance.
2.4 Country-by-Country Report (CbCR)
| Item | Detail |
|---|---|
| Threshold | Consolidated group revenue ≥ EUR 750 million |
| Filing deadline | 12 months after end of reporting period |
| Filing method | Electronic (XML), via HMRC |
| Notification | Required annually |
3.2 Accepted Methods
| Method | Accepted |
|---|---|
| Comparable Uncontrolled Price (CUP) | Yes |
| Resale Price Method (RPM) | Yes |
| Cost Plus Method (CPM) | Yes |
| Transactional Net Margin Method (TNMM) | Yes |
| Profit Split Method (PSM) | Yes |
No strict hierarchy; most appropriate method based on facts and circumstances. HMRC follows OECD Guidelines.
Section 4 -- Filing Obligations
| Obligation | Detail |
|---|---|
| Specified TP records (Master/Local File) | Maintain; provide within 30 days of HMRC request |
| TP return/disclosure | No separate TP return; self-assessment within CT600 |
| CT600 declaration | Confirm arm's length compliance |
| CbCR filing | Annual electronic filing |
| APA annual report | Filed with company tax return |
Section 5 -- Deadlines
| Item | Deadline |
|---|---|
| Documentation preparation | Before filing the relevant tax return |
| Documentation provision to HMRC | Within 30 days of information notice |
| Corporate tax return (CT600) | 12 months after end of accounting period |
| CbCR filing | 12 months after end of reporting period |
| CbCR notification | Within 12 months of end of reporting period |
Section 6 -- Penalties
| Offence | Penalty |
|---|---|
| Failure to keep/preserve specified TP records | Up to £3,000 per failure per return period |
| Tax-geared penalty (inaccuracy in return) | Careless: 0-30%; Deliberate: 20-70%; Deliberate and concealed: 30-100% |
| Failure to notify CbCR | Standard information penalties |
| Late CbCR filing | Standard penalties for late returns |
| Failure to provide information on request (general) | £300 initial + £60/day ongoing |
Section 7 -- Advance Pricing Agreements (APA)
| Item | Detail |
|---|---|
| Availability | Yes |
| Types | Unilateral, Bilateral, Multilateral |
| Governing legislation | Sections 218-230, TIOPA 2010 |
| Application | Expression of Interest (EOI) to BAI Transfer Pricing Team |
| Fees | No fees charged by HMRC |
| Typical duration | 3-5 years prospective (rollback possible) |
| Annual reporting | APA report filed with CT return |
| Process timeline | Unilateral: 12-18 months; Bilateral: 18-36 months |
| Competent Authority | HMRC BAI Transfer Pricing Team |
The UK does not have formal statutory safe harbour rules for transfer pricing.
However, several practical reliefs exist:
Section 8 -- Safe Harbours (practical reliefs)
| Area | Detail |
|---|---|
| SME exemption | Entities with turnover < £10m, < 50 employees, assets < £5m: exempt from Part 4 adjustment |
| Medium-sized exemption | May apply for medium companies (< 250 employees, turnover < £36m or assets < £18m) unless transaction is with a tax haven |
| Low-value services | HMRC accepts OECD simplified approach (cost-plus 5%) for qualifying services |
| Materiality | HMRC applies practical materiality in audit selection; immaterial transactions unlikely to be challenged |
| UK-to-UK exemption | Domestic related-party transactions exempt from specified TP record requirements |
The SME and medium-sized company exemptions from Part 4 adjustments significantly narrow the scope of UK TP rules in practice. Medium-sized companies are exempt unless the counterparty is in a non-qualifying territory (tax haven).
Companies within the SME/medium exemption may still be exposed to the Diverted Profits Tax (25% rate) if profits are diverted from the UK through arrangements lacking economic substance.
Section 9 -- Recent Developments
| Date | Development |
|---|---|
| August 2023 | Transfer Pricing Records Regulations 2023 (SI 2023/818) published |
| April 2023 | Specified TP records effective for CT periods beginning on/after this date |
| 2024-25 | Specified TP records effective for Income Tax purposes |
| Ongoing | Summary Audit Trail (SAT) under further consultation |
| 2024 | BEPS Pillar Two (GloBE) implemented via Finance Act 2023 for periods from 31 Dec 2023 |
| Ongoing | OECD Pillar One Amount B: UK monitoring but not yet adopted |
| 2024 | Transfer pricing mismatch provisions under review |
Section 10 -- Interaction with Other Skills
| Related skill | Interaction |
|---|---|
| uk-corporation-tax | TP adjustments increase taxable profits; interaction with loss utilisation |
| uk-vat | TP adjustments may affect customs value and VAT on imports |
| uk-bookkeeping | Related-party disclosures in financial statements must align with TP positions |
| Diverted Profits Tax (DPT) | 25% rate applies where profits diverted from UK; TP documentation relevant to DPT risk |
| CbCR | Global risk assessment tool; feeds HMRC compliance approach |
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Review status
Accountant-reviewed
Reviewed by a named licensed practitioner against the stated sources, as general reference material.
Accountant-reviewed · Guide version 10
Reviewed by James Power · 3 June 2026
A named accountant reviewed this complete Guide version within the stated scope. It is not a guarantee.
View review record →Other United Kingdom computations in the OpenAccountants Tax Library.
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