Crowe responds to HMRC consultation on the International Controlled Transactions Schedule
Crowe UK has submitted its response to HMRC's consultation on the proposed International Controlled Transactions Schedule (ICTS), a new reporting framework intended to support HMRC's transfer pricing risk assessment activities.
The consultation seeks views on how the proposed regime should operate and the practical implications for businesses.
Under current proposals, all companies within the scope of transfer pricing or which have a permanent establishment will need to report annually using the ICTS for accounting periods beginning on or after 1 January 2027. Information about cross-border intra-group transactions will need to be provided to HMRC, including the value, type of transaction and the transfer pricing methodology applied.
Our response welcomes HMRC's objective of improving transfer pricing risk assessment while highlighting several important considerations to ensure the new regime is proportionate, practical and effective.
Three key messages from Crowe's response
1. Avoid duplication and reduce unnecessary compliance burdens
A consistent theme throughout our response is the need to avoid duplication between the proposed ICTS and existing transfer pricing documentation requirements, including Local Files and Master Files. Many businesses already invest significant time and resources in preparing transfer pricing documentation, and any new reporting requirement should complement rather than duplicate those obligations.
We encouraged HMRC to provide greater clarity on how the ICTS will interact with existing compliance requirements and to identify opportunities to streamline reporting wherever possible.
2. Focus reporting on larger multinational groups
Crowe's response suggests that the most extensive reporting requirements should be directed towards larger multinational groups where transfer pricing risks are likely to be most significant. We noted that smaller groups may face substantial implementation and compliance costs despite posing relatively lower transfer pricing risk.
We therefore recommended that HMRC consider a more targeted approach, potentially aligning the reporting population more closely with existing Country-by-Country Reporting thresholds or introducing simplified reporting mechanisms for smaller groups.
3. Recognise that transfer pricing cannot be assessed through data alone
While we support HMRC's ambition to make greater use of data and technology, our response highlights that transfer pricing remains highly fact-specific and commercially driven. Automated analysis can be a useful risk assessment tool, but it cannot fully capture the commercial context behind many transfer pricing outcomes.
We emphasised the importance of allowing businesses to provide explanations and contextual information alongside any reported data to help reduce the risk of incorrect conclusions being drawn from automated reviews.
Supporting effective and proportionate reform
Overall, Crowe supports HMRC's objective of creating a more efficient and data-driven approach to transfer pricing risk assessment. However, we believe any new regime should be guided by four core principles: proportionality, minimising duplication, focusing on larger multinational groups and recognising the limitations of purely automated risk assessment.
The consultation response was prepared by the Crowe UK Transfer Pricing team and submitted to HMRC on 31 July 2026.
For further guidance on the above, please get in touch with your usual Crowe UK contact.
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