Identifying transfer pricing risk

Copyright © 2025 LexisNexis
Produced by Tolley in association with Anne Fairpo
Corporation Tax
Guidance

Identifying transfer pricing risk

Copyright © 2025 LexisNexis
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 for the majority of cases (36 months for particularly complex and high risk cases). 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

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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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  • 23 Oct 2025 09:10

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