Recent developments in transfer pricing in the UK

Transfer pricing remains a critical area for UK-based multinational enterprises as international tax regulations evolve. HMRC has issued updated compliance guidelines emphasizing the importance of robust documentation, appropriate pricing methods, and regular policy reviews. It has also reinforced a risk-based approach to identifying high-risk transactions, with a focus on economic substance and proactive engagement with businesses. Additionally, the use of Advanced Pricing Agreements (APAs) and Mutual Agreement Procedures (MAPs) has grown, helping companies manage disputes and avoid double taxation. With transfer pricing enquiries yielding £1.786 billion in 2023–24, HMRC scrutiny is intensifying. UK businesses are encouraged to review and strengthen their compliance processes, transfer pricing policies, and risk indicators to stay ahead of regulatory expectations and reduce audit risks.