8 January 2008

HMRC announce a new approach to Transfer Pricing Work

Back on Budget Day 2006 Gordon Brown, the then Chancellor, announced that there would be a review of HMRC's links with large business, which commenced on 30 June that year. The review identified that a major concern for large businesses is the impact of transfer pricing enquiries on their businesses.

Following the review, in October 2007 HMRC issued a document entitled "Making a difference: clarity and certainty" in which they announced that they would introduce a new approach to transfer pricing enquiries to involve greater specialisation and team work, a focus on higher risk issues, action plans for enquiries agreed with companies and monitoring of progress.

HMRC are now launching what they describe as a 'radical new technical specialism' which they say will reach across operational, economic analysis and policy units. These Transfer Pricing Specialists are currently being appointed and will then receive further specialist training.

HMRC have said that transfer pricing enquiries should now largely be completed within 18 or 36 months, depending on the complexity, and a new process will start this month to ensure consistency between offices, the allocation of resources to risk and wider departmental strategic objectives.

In April 2008 HMRC 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.

It looks like HMRC have taken on board some of the UK's large businesses' concerns regarding transfer pricing enquiries and hopefully such business will see significant improvements in the process and consistency of enquiries.

If you would like to discuss any transfer pricing issues please contact your usual Hazlewoods' contact or Nick Haines (NMH@hazlewoods.co.uk).