HMRC's New Approach to Transfer Pricing Work

The Review of Links with Large Business identified that a major concern for our large business customers is the impact of transfer pricing enquiries on their business.

Following a public consultation, we announced in October 2007 in the document "Making a difference: clarity and certainty" that we will press ahead with the introduction of a new approach to transfer pricing enquiries involving greater specialisation and team work, a focus on issues of higher risk, action plans for enquiries agreed where possible with companies, and active monitoring of progress.

We are now launching a radical new technical specialism, that reaches across our operational, economic analysis and policy units, to deliver the approach. These Transfer Pricing Specialists are now being appointed and arrangements are being made to provide additional training to enhance their specialist skills. Plans for resolving transfer pricing enquiries within 18 or 36 months, depending on the complexity, are largely in place. A new internal governance process will start to operate from January. This will address issues around consistency of approach, allocation of resource to risk and wider departmental strategic objectives.

The draft guidance published in the public consultation document in June 2007 was essentially endorsed by those who responded, and has now been adopted.

In April 2008 we are also planning to publish statistics about the average time taken to resolve the transfer pricing enquiries that were settled in the three months from January to March 2008, and the average age of open enquiries at the end of that quarter.

In November 2006 we committed to introducing a more efficient approach to transfer pricing enquiries, including guidance agreed with business, by December 2007. We have now delivered on that commitment, through the implementation of the first phase of our new approach.