Most multinationals seek to comply with transfer pricing rules and regulations, making conscientious efforts to establish prices for their controlled transactions that are consistent with the arm’s length principle.
However, HMRC’s approach to transfer pricing has become more rigorous and their reluctance to enter into informal discussions with multinationals on TP matters is likely to increase both uncertainty for businesses and the number of TP enquiries. Therefore, the value of clear and comprehensive TP policies and documentation is greater than ever.
HMRC case teams will carefully scrutinise TP documentation to determine whether the business’s transfer pricing is actually on an arm’s length basis. They will not be fooled by the bulk or apparent sophistication of a report, but will drill down to the substance to determine whether its assertions are supported by credible evidence.
Therefore it is important that businesses carefully evaluate, at or before the time of filing their tax return, their compliance with the arm’s length standard and all other transfer pricing rules that apply to them.
Well-prepared policies and documentation will give HMRC some assurance that the business has analysed the positions it reports on tax returns, has considered the best available comparable data and has reached defendable transfer pricing positions.
I was a senior transfer pricing specialist with HMRC until mid-2017. I’ve worked on a range of TP issues, including widget, services, financials and intangibles, covering most business sectors and I’ve carried out many TP risk assessments and enquiries on multinationals, critically reviewed their TP policies and documentation and negotiated Advance Thin Cap Agreements.
I now offer these services on a freelance basis. Particularly helpful are my “sense-checks“ of businesses’ TP documentation, where I identify areas that may trigger “potential TP risk” alarm bells within HMRC so they can be corrected, clarified or expanded. Most businesses would benefit from an independent review of their documentation when faced with an HMRC risk review or enquiry.
So, whether you’re a multinational or professional firm with no in-house transfer pricing expertise seeking independent transfer pricing advice, compliance support or short-term transfer pricing resource to keep the wheels turning, to find out how I can help you please use the “contact me” tab above or email me with brief details of your situation.
Meeting your transfer pricing obligations can be a complex time-consuming task. As a freelance TP expert with HMRC experience, I am ideally placed to provide you with an independent view on all aspects of TP to ensure clear, practical and tenable outcomes.