New transfer pricing reporting requirements expected from 2027

HMRC is consulting on the introduction of a new International Controlled Transactions Schedule (ICTS). This represents a significant change to UK transfer pricing compliance and is expected to apply to accounting periods beginning on or after 1 January 2027. 

While the rules are still in draft, the direction of travel is clear: more granular reporting, greater transparency, and increased data-driven scrutiny. Businesses with cross-border related party transactions should begin assessing the impact now. 

What is the ICTS?

This is a proposed annual reporting requirement that will accompany the corporation tax return. 

It will require businesses to submit standardised, transaction-level data on cross-border related party dealings. This sits alongside existing transfer pricing requirements, including Local Files and Master Files, rather than replacing them.  

HMRC’s stated aim is to enhance its ability to: 

• Risk assess transfer pricing positions using structured data 

• Target enquiries more effectively 

• Reduce the duration of compliance interventions for lower-risk taxpayers 

Who is expected to be in scope?

The ICTS is likely to apply to: 

• UK resident companies 

• Non-UK resident companies within the UK corporation tax charge (e.g. UK permanent establishments) 

• Certain partnerships and other entities 

The requirement will apply where a threshold condition is met. Broadly, this includes: 

• Transactions with related parties in non-qualifying territories, or 

• Cross-border related party transactions with a total value of £1 million or more  

The SME exemption for transfer pricing will continue to apply in many cases. However, this exemption does not apply in all circumstances (for example, where non-qualifying jurisdictions are involved), meaning some smaller groups may still be required to comply.  

For example, a small UK company that has transactions with a related party in Jersey may be required to complete the ICTS forms, as the SME exemption and £1,000,000 aggregate de minimis do not apply where transactions are undertaken with a related party that is not in a qualifying territory. 

What will need to be reported?

The draft template suggests that the ICTS will require the reporting entity will be required to provide information about itself, its ultimate global owner, and relatively granular information in relation to a range of specific transaction categories, including: 

• Goods and tangible property 

• Fixed assets 

• Intangibles 

• Intercompany services 

• Financial transactions (including loans and derivatives)  

For each category, businesses are expected to report: 

• Transaction values 

• Counterparty and jurisdiction 

• Transfer pricing methodology 

• Relevant financial metrics 

Reporting thresholds may apply at £100,000 per transaction category, although higher thresholds may apply for groups already preparing Local Files.  

Timing

These rules are expected to apply for accounting periods beginning on or after 1 January 2027, with filing aligned to the corporation tax return deadline.  

Key implications

The ICTS represents a move towards data-led transfer pricing compliance in the UK. 

For businesses, this is likely to result in: 

• Increased compliance requirements 

• Greater visibility of transfer pricing positions to HMRC 

• Higher likelihood of enquiry where data indicates risk or inconsistency 

Practical challenges

The most significant challenge is expected to be data readiness. 

Many businesses do not currently: 

• Capture transaction data at the required level of detail 

• Align accounting systems with transfer pricing categories 

• Maintain consistency between financial data, legal agreements and transfer pricing policies 

As a result, implementation may require: 

• Changes to systems and reporting processes 

• Additional or reallocation of internal resource 

• Increased reliance on specialist support 

Actions to consider now

Although the first filings are not expected until FY27 and beyond, early preparation will be important. 

Businesses should consider: 

• Scoping – Assess whether ICTS is likely to apply based on transaction values and jurisdictions 

• Data review – Identify how intercompany transactions are currently recorded and whether this aligns with the proposed requirements 

• Transfer pricing alignment – Ensure policies, agreements and actual transactions are consistent 

• Implementation planning – Consider system, process and governance changes required ahead of first filing 

How we can help

We are supporting clients in: 

• Assessing whether they are within scope 

• Identifying data and systems gaps 

• Aligning transfer pricing policies with reporting requirements 

• Preparing for implementation ahead of 2027 

If you believe your business may be affected by ICTS, or if you are unsure, please contact one of our international tax experts as soon as possible.