In brief
The UK government has launched a technical consultation (June–July 2026) on the introduction of a new International Controlled Transactions Schedule (ICTS), marking a significant shift in the UK transfer pricing compliance framework. We discuss below the new reporting requirement and key implications for businesses.
In more detail
The UK government has launched a technical consultation (June–July 2026) on the introduction of a new International Controlled Transactions Schedule (ICTS), marking a significant shift in the UK transfer pricing compliance framework.
What is changing?
- HMRC intends to require in-scope multinational groups to file an annual ICTS alongside their corporation tax return, providing standardised, transaction-level data on cross-border related-party dealings.
- The rules are expected to apply to accounting periods beginning on or after 1 January 2027, with first filings likely due in 2028.
Policy objective
The ICTS is designed to enable automated, data-driven risk assessment by HMRC, allowing authorities to:
- Identify transfer pricing risk more accurately and earlier
- Conduct more targeted and efficient enquiries
- Reduce the duration of investigations for compliant taxpayers
More broadly, the measure aims to improve fairness and ensure profits are taxed where economic activity occurs in the UK.
Scope and content
The ICTS will apply to UK entities and UK permanent establishments with cross-border related-party transactions within the scope of UK transfer pricing rules.
Businesses will be required to report granular information, likely including:
- Nature and type of controlled transactions
- Identity and jurisdiction of counterparties
- Transfer pricing methodologies applied
- Financial values and pricing outcomes
- Details of financing, services, and asset transfers
This represents a move toward standardised, high-volume transaction reporting, rather than purely documentation-based compliance.
Key implications for businesses
- Significant increase in compliance burden: Companies will need to extract and validate detailed transaction-level data across systems
- Greater HMRC scrutiny: Data will be used to detect inconsistencies between policy, outcomes, and documentation
- Shift to real-time risk assessment: HMRC will be able to identify potential issues before formal enquiries
- Systems and governance challenges: Existing finance and TP processes may not capture the required level of detail
Overall, the ICTS represents a material change in how transfer pricing risk is assessed and managed in the UK.
What should businesses do now?
With implementation approaching, businesses should begin preparing by:
- Reviewing transfer pricing policies and their operational implementation
- Assessing data availability and system readiness
- Identifying gaps between reported financials and TP outcomes
- Strengthening documentation and governance frameworks
Early preparation will be critical to mitigating risk and avoiding disruption once the rules come into force.
Please contact us should you have any questions or want to discuss further.