TP Country Profile
United Kingdom Transfer Pricing Country Profile
Legal framework, pricing methods, documentation, reporting and dispute routes, with a legal cut-off of 17 October 2026.
Edition 1.0
Legal cut-off: 17 October 2026
UK accounting periods beginning before and on or after 1 January 2026; historic documentation periods from 1 April 2023
United Kingdom transfer pricing in brief
The United Kingdom applies an arm's length rule to related-party dealings under Part 4 of the Taxation (International and Other Provisions) Act 2010 (TIOPA 2010), reformed by Finance Act 2026 for periods beginning on or after 1 January 2026. Groups with €750 million of consolidated revenue must keep and preserve an OECD-style Master File and Local File, which are produced to HMRC on request rather than filed each year. Finance Act 2026 also replaces the diverted profits tax with a corporation tax charge on unassessed transfer pricing profits for later accounting periods.
United Kingdom transfer pricing at a glance
Topic | Headline position |
|---|---|
Law | TIOPA 2010 Part 4, reformed by Finance Act 2026 (Royal Assent 18 March 2026) for chargeable periods beginning on or after 1 January 2026; interpreted consistently with the OECD Transfer Pricing Guidelines under section 164 |
Standard | An arm's length provision is substituted where two persons are connected through participation in management, control or capital and the terms give a potential UK tax advantage; there is no fixed ownership percentage, and a size-based SME exemption remains |
Methods | Comparable Uncontrolled Price, Resale Price, Cost Plus, Transactional Net Margin, Transactional Profit Split and justified alternatives; the most appropriate method applies, with no UK priority order |
Documentation | Master File and Local File kept and preserved under the Transfer Pricing Records Regulations 2023 for accounting periods beginning on or after 1 April 2023, and delivered to HMRC on request rather than filed |
Master File | Required for UK persons in a multinational group with €750 million or more of consolidated revenue in the period; no lower threshold and no separate annual filing |
Group reports | Country-by-country report for groups with €750 million or more of consolidated revenue in the preceding fiscal year, normally filed by the UK-resident ultimate parent through the HMRC service as XML |
Other reporting | No separate annual transfer pricing form with the company tax return; Finance Act 2026 gives a power for an International Controlled Transactions Schedule, which is not yet operative |
Disputes | Advance Pricing Agreements under TIOPA 2010 Part 5, Mutual Agreement Procedure through HMRC as competent authority, and appeals to the First-tier Tribunal and higher courts |
What the full profile covers
The full 20-page profile includes:
Legal framework, covered persons and special regimes
Methods, benchmarking and comparability
Master File, Local File, country-by-country reporting and returns
Transaction-specific rules, permanent establishment profit attribution and Amount B
Adjustments and implementation, including year-end true-ups
Audits, penalties and limitation periods
Advance Pricing Agreements, Mutual Agreement Procedure and appeals
Recent developments and practical priorities
Download the full profile for the SME size tests, record-keeping materiality rules, penalty tables, the unassessed transfer pricing profits process and the dispute timelines.
Frequently asked questions
What is transfer pricing in the United Kingdom?
Under Part 4 of TIOPA 2010, where two persons are connected through participation in management, control or capital and the terms of their dealings give one of them a potential UK tax advantage, the tax computation substitutes an arm's length provision. Finance Act 2026 reformed the rules for periods beginning on or after 1 January 2026. HMRC administers them, and the OECD guidelines guide interpretation.
Does the United Kingdom require a Local File or Master File?
Yes, for groups with €750 million or more of consolidated revenue in the relevant period. Qualifying UK companies, trustees and partnerships must keep and preserve an OECD-style Master File and Local File for accounting periods beginning on or after 1 April 2023. They are not filed each year; they are produced when HMRC asks. Smaller groups remain within Part 4 and still need records that support an arm's length return.
Who must file country-by-country reporting?
Groups with consolidated revenue of €750 million or more in the preceding fiscal year. The UK-resident ultimate parent normally files the report with HMRC as XML through its country-by-country reporting service. A UK subsidiary of a foreign-parented group does not automatically file a duplicate report; that depends on the parent's residence and the exchange arrangements.
What other returns apply to foreign-owned entities?
There is no separate annual transfer pricing form filed with the company tax return, and required Part 4 adjustments go into the tax computation. Finance Act 2026 gave a power to introduce an International Controlled Transactions Schedule, but no final rules were confirmed at the cut-off, so it is not yet a filing requirement.
What are the transfer pricing dispute options?
HMRC can agree unilateral, bilateral and multilateral Advance Pricing Agreements under Part 5 of TIOPA 2010. Double taxation can be taken to HMRC as competent authority under the relevant tax treaty, with time limits set by each treaty. Domestic challenges go through appeal and review to the First-tier Tribunal and the higher courts.
Where can I get the full United Kingdom transfer pricing profile?
Download the 20-page United Kingdom Transfer Pricing Country Profile (Edition 1.0, legal cut-off 17 October 2026).
Related services
Prepared by AventaaGlobal Advisors LLP. Edition 1.0, legal cut-off 17 October 2026. This summary is for general information and is not legal or tax advice.