UK ICTS Transfer Pricing Reporting: HMRC Consultation Closes 31 July 2026

On 16 June 2026 HMRC opened a technical consultation on the International Controlled Transactions Schedule (ICTS) — a new annual transfer pricing reporting requirement for in-scope multinational groups. Finance Act 2026 already gives HMRC the power to require filings; this consultation sets the detailed design through draft regulations and a draft HMRC notice.

The ICTS takes effect for accounting periods beginning on or after 1 January 2027. Responses are due by 31 July 2026 to [email protected]. For UK entities with related-party cross-border transactions, the filing will complement — not replace — Country-by-Country Reporting and Transfer Pricing Records requirements.

Reporting applies to UK entities with international controlled transactions meeting transfer pricing or permanent establishment conditions under Part 4 TIOPA. Transactions must exceed materiality thresholds set in the draft HMRC notice — higher thresholds apply to groups already subject to Country-by-Country Reporting.

Specified transactions include those with residents of non-qualifying territories, or with qualifying-territory counterparties where aggregate income or expense amounts exceed £1 million for CbCR groups (or £100,000 for non-CbCR entities). SME exemptions and Advance Pricing Agreement-covered transactions are generally excluded.

The ICTS captures structured financial data for automated HMRC risk assessment — not the narrative master and local files required under Transfer Pricing Records Regulations 2023. Where a local file exists, businesses should largely reuse existing transfer pricing analysis when completing the ICTS.

HMRC revised the draft template following spring 2025 feedback to reduce administrative burden. Section A now allows aggregation aligned with local file transfer pricing policies — multiple counterparties priced under the same comparability analysis can be disclosed on a single line rather than row-by-row.

Businesses must disclose the transfer pricing methodology, tested-party status, profit level indicators, counterparty lists, and overall P&L impact. For profit split methods, aggregation is permitted where a single comparability analysis applies. Transactions without comparability analysis must be reported individually.

Section B covers financial transactions with separate rules for financial services businesses. The vast majority of non-FS companies will have nothing to disclose in FS-specific sections.

Draft penalties include £300 per accounting period for failure to file, daily penalties up to £60 (extendable to £1,000 with tribunal approval) for continued failure, and up to £3,000 per period for inaccurate information where the business knew or ought to have known of the error.

HMRC expects a soft-landing period for first filings through its reasonable excuse interpretation — businesses will need time to adjust to the new requirement. Further guidance on the soft-landing approach will be published before implementation.

The government plans to lay the statutory instrument in late 2026, with the HMRC notice published by year-end. Software providers will be consulted on IT design — the Excel template in the consultation is illustrative only.

Map UK entities against draft threshold rules and identify SICTs with non-qualifying territory counterparties or aggregate values above £100,000/£1 million limits. Review whether ICAP low-risk ratings should trigger reporting exemptions — HMRC is consulting on this point.

Align ICTS data preparation with existing local file workflows to avoid duplicate analysis. Respond to the consultation by 31 July if aggregation rules, penalty levels, or FS sector provisions affect your group structure.

FinnAccountings Compliance Agent tracks cross-border transaction data and filing calendars — start a free trial to prepare for ICTS alongside your existing transfer pricing documentation.