UK transfer pricing documentation has had a formal shape since 1 April 2023: large multinational groups must keep an OECD-style master file and local file. What is coming next is bigger — the International Controlled Transactions Schedule, an annual return of cross-border related party transactions, legislated in Finance Act 2026 and intended for accounting periods beginning on or after 1 January 2027. The SME exemption survives both.
The master file and local file requirement
The Transfer Pricing Records Regulations 2023 require in-scope UK entities to keep and preserve a master file and local file as described in the OECD Transfer Pricing Guidelines approved in January 2022. Before this, the UK relied on general record-keeping obligations and a business could satisfy them in more or less whatever form it liked.
Scope follows country-by-country reporting. The requirement applies to UK entities that are members of a multinational group within the CbCR regime — consolidated group revenue of €750 million or more. It took effect for corporation tax purposes for accounting periods beginning on or after 1 April 2023, and for income tax from 2024/25.
The practical change is evidential. A group within scope that cannot produce the files on request is in a materially worse position than one that can, because the documentation is now the starting point of any enquiry rather than something assembled in response to one.
The summary audit trail
Alongside the files, HMRC has been consulting on a summary audit trail — a questionnaire setting out the main steps taken in preparing the local file. It is worth being precise about its status: the 2023 regulations give HMRC the power to require one by published notice, but HMRC has said it will continue to consult on the requirement. It is not in force, and no implementation date has been given.
Treat it as a direction of travel rather than a current obligation. The direction is clear enough — HMRC wants to see how a transfer pricing position was reached, not just what it concluded.
ICTS: the annual schedule
The International Controlled Transactions Schedule is the substantial change. It is an annual filing capturing factual information about relevant cross-border related party transactions in a standardised format, which HMRC will use for automated and manual transfer pricing risk assessment.
The legislation is in place. Section 48 of Finance Act 2026 gives HMRC power to make regulations requiring reporting entities to supply specified information, at specified times, in a specified form, with penalty and appeal provisions attached. But section 48 sets no commencement date of its own — everything depends on the regulations underneath it.
Where that stands as at autumn 2026:
- Intended commencement is accounting periods beginning on or after 1 January 2027;
- A technical consultation on draft regulations and a draft HMRC notice ran from June to July 2026;
- The statutory instrument is expected to be laid in late 2026, with HMRC intending to publish the notice by the end of the year;
- The detailed rules are therefore not yet final. Anyone building a data collection process now is building against a draft.
HMRC has put roughly 75,000 businesses within scope of UK transfer pricing, permanent establishment and foreign permanent establishment legislation. The de minimis thresholds as consulted were an overall aggregate transaction value of £1 million, with a £100,000 category-level figure for businesses outside CbCR — but those come from the summary of responses rather than the draft regulations, so treat them as consulted rather than settled.
The SME exemption is retained
This is the point most worth making to owner-managed and mid-market groups, because the consultation caused genuine alarm. The government proposed removing the exemption for medium-sized businesses and, after consultation, did not proceed. Small and medium-sized enterprises continue to benefit from the existing exemption from transfer pricing, and the government said it would make no changes at present, citing the Industrial Strategy and the administrative burden on SMEs.
One qualification: the government proposes to retain the power to issue a transfer pricing notice to a small business where the provision feeds into Patent Box profits. The exemption is not absolute, and it never was.
The wider reform running alongside
Section 47 and Schedule 6 of Finance Act 2026 rewrite substantial parts of the transfer pricing code in TIOPA 2010 — the participation condition, intangibles, financial transactions, loan relationships, intangible fixed assets, exchange gains and losses, and interpretation consistent with the OECD guidelines. In general these changes take effect for chargeable periods beginning on or after 1 January 2026.
The change with the widest reach is the general repeal of the requirement to apply transfer pricing to UK-to-UK transactions. Groups that have been preparing domestic transfer pricing analyses to support intra-UK arrangements should check whether that work is still needed for periods from January 2026 — for many it will not be, and that is a real reduction in compliance effort rather than a technical footnote.
What to do now
For groups above the CbCR threshold, the master file and local file are current obligations and should already exist. For everyone with cross-border related party transactions, the work worth starting is data: ICTS is a standardised schedule, which means the information has to be capturable in a consistent format across entities, and finance systems that record intercompany transactions loosely will not produce it. That is a systems project with a 2027 deadline, not a tax return exercise.
And because the regulations are still to be laid, build for the shape of the requirement rather than its precise fields, and revisit once the notice is published.
Acumon advises groups on transfer pricing documentation, intercompany policy and the data behind it through international tax and corporation tax work, alongside tax compliance — see also our guides to Pillar 2 and international tax planning. If your group is near the €750 million threshold, the year you cross it is the year the files must already exist.