The UK transfer pricing landscape is set for significant change with the introduction of the International Controlled Transactions Schedule (ICTS). On 16 June 2026, HMRC published a technical consultation, running until 31 July 2026, on the new reporting requirement which is expected to apply to accounting periods beginning on or after 1 January 2027.

What is the ICTS?

The ICTS forms part of HMRC's increased focus on data-driven transfer pricing risk assessment, requiring multinational groups with UK operations to provide additional information on cross-border related party transactions through a new annual reporting obligation.

The ICTS is a new annual reporting schedule that will require in-scope businesses to submit detailed information on their international related party transactions alongside their corporation tax return. Unlike traditional transfer pricing documentation, which is typically reviewed only if HMRC opens an enquiry, the ICTS will provide HMRC with transaction-level data upfront.

HMRC intends to use this information for both automated and manual risk assessment, enabling a more data-driven approach to identifying transfer pricing risks and directing enquiries towards areas where adjustments are most likely to arise. HMRC has stated that the ICTS is broadly aligned with comparable international reporting regimes and is therefore intended to minimise additional administrative burdens by requiring the reporting of readily available information.

Who will be affected?

The proposed rules have a broader scope than some existing transfer pricing reporting requirements and, subject to certain thresholds, they are expected to apply to:

• UK-resident companies

• Partnerships whose members include a company within the charge to UK corporation tax

• Non-UK resident companies within the charge to UK corporation tax (e.g. as a result of a UK permanent establishment)

An entity will generally fall within scope if it has transactions with a "non-qualifying territory" (broadly, a jurisdiction that does not have an appropriate tax treaty with the UK) or if its aggregate income and expense amounts from transactions with other territories are £1 million or more. Importantly, the threshold is measured using total income and expense amounts on an aggregate basis, rather than net transaction values.

What information will need to be reported?

HMRC's draft ICTS template indicates that businesses may be required to disclose financial information on their controlled transactions, together with details of the transfer pricing policy applied. This is expected to include:

• Counterparty details and jurisdiction

• The nature and value of controlled transactions

• Income and expenditure outcomes associated with those transactions

• The transfer pricing methodologies and pricing framework applied

What should businesses be doing now?

Although the first ICTS filings are not expected until 2028 for accounting periods beginning on or after 1 January 2027, businesses should begin assessing how they will comply with these new requirements. In particular, organisations should consider:

• Reviewing existing transfer pricing policies and documentation

• Evaluating whether current systems can capture the data likely to be required for reporting

• Mapping intercompany transactions and related counterparties

• Identifying and addressing any data gaps

How we can help

The introduction of the ICTS is likely to increase both the compliance burden and HMRC scrutiny of cross-border related party transactions.

Our transfer pricing specialists can help businesses prepare for ICTS by carrying out readiness assessments, mapping controlled transactions, reviewing transfer pricing documentation, identifying data gaps, and providing ongoing compliance support.

If you’d like to speak to one of our experts to discuss how we can support your organisation with the introduction of the ICTS, please get in touch by filling out the form below.