Transfer pricing

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FORTHCOMING CHANGE relating to UK transfer pricing legislation: On 29 April 2025, the UK government published draft legislation for technical consultation which proposes several changes to UK transfer pricing rules (as well as to the UK rules on permanent establishment and the diverted profits tax). These include, amongst other changes, the removal of UK-to-UK transfer pricing (subject to some exceptions to prevent opportunities for tax arbitrage), amendments to the participation condition, and various changes to the provisions governing financial transactions. The draft legislation follows an initial policy consultation on reform in this area launched by the Conservative government in 2023, and the announcement of follow-up consultations by the Labour government at Autumn Budget 2024. A further consultation was also launched on 29 April 2025 on proposals to restrict the existing exemption for SMEs to small enterprises only and introduce a new filing obligation for in-scope multinationals. At Autumn Budget 2024 the government announced that it would be reviewing the transfer pricing treatment of cost contribution arrangements, where the costs and benefits of developing intellectual property are shared by group companies, but no further developments in this area were announced

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Latest Tax News

Tax weekly highlights—7 August 2025

This week's edition of Tax weekly highlights includes: (1) News Analysis of the Supreme Court’s decision in Delta Merseyside on private hire operators acting as agents, (2) News Analysis of the UT’s decision in Medpro Healthcare, and (3) HMRC publishing a new manual on MTT and DTT.

Legislation Day: Draft Finance Bill 2026—tackling non-compliance in the umbrella company market

Tax analysis: On Legislation Day 2025, draft Finance Bill 2026 legislation was published that, if enacted, would make agencies and end clients jointly and severally liable for Pay As You Earn (PAYE) and National Insurance Contributions (NICs) failings by umbrella companies. John Chaplin, partner at BDO, considers these new provisions.

Supreme Court holds that private hire operators outside London and Plymouth are entitled to accept bookings as agents (D.E.L.T.A. Merseyside Ltd and another v Uber Britannia Ltd)

Tax analysis: In D.E.L.T.A. Merseyside Limited and another v Uber Britannia Limited, the Supreme Court unanimously dismissed Uber Britannia’s appeal and found that private taxi operators may structure their arrangements to act as agents, thereby reducing the amount of the fare that may be subject to VAT.

UT considers whether the decisions in Martland and Katib are binding on the FTT (Medpro Healthcare Ltd & Another v HMRC)

Tax analysis: In Medpro Healthcare Ltd, the Upper Tribunal (UT) allowed an appeal against a First-tier Tax Tribunal (FTT) decision to refuse permission to commence late appeals against penalties and personal liability notices. The UT found that the FTT had erred in law and remitted the case to be heard again by a differently constituted FTT.

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