United Kingdom Transfer Pricing Documentation Requirements
The United Kingdom made the OECD-standard Master File and Local File mandatory for large groups for accounting periods beginning on or after 1 April 2023. The documentation is produced on request within 30 days of a formal information notice, and a small-and-medium-sized-enterprise exemption removes most other businesses from the transfer pricing rules altogether.
Requirements at a glance
| Requirement | Threshold | Deadline | Deadline type | Language | Penalty |
|---|---|---|---|---|---|
Master File Required | UK members of groups within the CbC reporting threshold (broadly group revenue ≥ EUR 750m) | On request | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 30 days. | EN | Yes (Schedule 36 notice penalties; daily defaults up to GBP 1,000) |
Local File Required | Same CbC-linked threshold as the Master File | On request | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 30 days. | EN (time allowed for translation) | Yes (Schedule 36 notice penalties; daily defaults up to GBP 1,000) |
CbC report Required | Group revenue ≥ EUR 750m | 12 months after fiscal year-end | Submission deadline The Country-by-Country report is filed by the group's ultimate parent entity; a local notification identifying the reporting entity is filed separately. | — | Yes |
Calculate your exact United Kingdom deadline
Enter your entity’s fiscal year-end to return your exact United Kingdom preparation or filing date. Available without registration.
Scope of the documentation obligation
For accounting periods beginning on or after 1 April 2023, UK members of groups that meet the Country-by-Country reporting size criteria, broadly consolidated group revenue of at least EUR 750 million, must keep a Master File and a Local File in the OECD format. The documentation is expected to exist by the time the corporation tax return is filed. It is produced when HMRC issues a formal information notice, at which point it must be provided within 30 days, although HMRC can agree an extension.
Businesses below that size are addressed separately. An exemption removes most small and medium-sized enterprises from the transfer pricing rules entirely, so the mandatory documentation requirement is concentrated on the largest groups.
Distinctive features of the United Kingdom regime
The UK penalty structure is the distinctive element. A flat penalty of GBP 3,000 exists for failing to retain records supporting the return, but in a transfer pricing context it is rarely the operative sanction. The substantive exposure arises where a large business fails to comply with a Schedule 36 information notice requesting its documentation within 30 days. That triggers a fixed penalty followed by daily default penalties, initially modest but capable of being increased on application to the tribunal to as much as GBP 1,000 a day. A reasonable-excuse defence is available.
The small-and-medium-sized-enterprise exemption is itself a notable feature, and it is under review, with the medium-sized tier expected to be removed. HMRC has also introduced a de minimis threshold below which certain intra-group transactions need not be documented, though those transactions must still be priced on arm’s length terms.
Benchmarking and comparables
The legislation does not prescribe local comparables, and HMRC accepts regional comparable sets. Single-year results for the tested party are generally compared against multi-year comparable data. A fresh benchmarking search is not required every year where operating conditions are unchanged, although a functional change calls for a new search and the financial data for the comparables should be updated annually. Discovery assessments may generally be raised within four years of the end of the accounting period, extending to six years for careless conduct and up to twenty years for deliberate conduct.
Frequently asked questions
Are small and medium-sized enterprises required to prepare UK transfer pricing documentation?
Generally no. An exemption removes most small and medium-sized enterprises from the transfer pricing rules. The exemption is under review and the medium-sized tier is expected to be withdrawn.
How quickly must UK documentation be produced once HMRC asks for it?
Within 30 days of a formal Schedule 36 information notice. HMRC can agree an extension, and continued failure to comply can lead to escalating daily penalties.
This guide is an informational research aid prepared by Comp-Press and is not tax or legal advice. Transfer pricing rules change; verify current requirements before relying on them for filing.