Identifying transfer pricing risk

Produced by Tolley in association with Anne Fairpo
Corporation Tax
Guidance

Identifying transfer pricing risk

Produced by Tolley in association with Anne Fairpo
Corporation Tax
Guidance
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Overview of approach to transfer pricing risk

There is an agreed framework in relation to transfer pricing that sets out the process for handling enquiries, with each case passing through a series of steps or ‘stage gates’. This methodology aims to provide a structured, consistent approach with an expected time frame for resolution of 18 months. Please refer to the HMRC approach to transfer pricing enquiries guidance note for further details.

HMRC will undertake a full risk assessment prior to opening a transfer pricing enquiry, a procedure that emulates their general interactions with large businesses. If the result of this risk assessment process suggests that there is a low risk of a transfer pricing issue arising, the transfer pricing enquiry will not be pursued. HMRC states that a number of factors taken together, rather than individual indicators alone, will signal the existence of a transfer pricing risk.

The results of the risk assessment will be used to compile a business case that is required to open a transfer pricing enquiry. For this reason, HMRC’s own

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Anne Fairpo
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Barrister


With effect from 1 June 2021, Anne Fairpo is a judge of the First-tier Tribunal sitting in the Tax Chamber. She was previously a fee-paid judge in the same Chamber. Her contributions to LexisPSL Tax and TolleyGuidance were written before her full-time appointment and are her personal view as she is not authorised to write on behalf of the Tribunals Service or the judiciary. Until April 2021, Anne was a tenant at Temple Tax Chambers. She was called to the bar in 2009 after 15 years as a solicitor. Anne’s experience and expertise covers UK and international corporate tax planning and disputes, having acted for a range of clients from small owner-managed businesses to listed multinationals, as well as having advised on intellectual property taxation and UK-US cross-border tax planning, with regard to both direct and indirect tax matters

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