Transfer pricing (TP) enquiries are becoming a commonplace challenge within the UK tax landscape. Once an enquiry is opened it can be a difficult process to manage. The average time for resolving such enquiries is often two years or more. The management time and external adviser fees associated with enquiries are therefore typically significant. HMRC’s approach to TP enquiries is governed by two policies: HMRC’s litigation and settlement strategy (the overarching policy basis as to how disputes should be handled) and HMRC’s TP governance (which is more operationally focused and sets out the required process and working practices). Typically the most effective and cost-efficient risk management takes place prior to the CT return submission and the raising of a TP enquiry. This entails: conducting a regular TP policy review; raising the level of TP awareness within the organisation; incorporating TP standards into operating policies and procedures: and...
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Transfer pricing (TP) enquiries are becoming a commonplace challenge within the UK tax landscape. Once an enquiry is opened it can be a difficult process to manage. The average time for resolving such enquiries is often two years or more. The management time and external adviser fees associated with enquiries are therefore typically significant. HMRC’s approach to TP enquiries is governed by two policies: HMRC’s litigation and settlement strategy (the overarching policy basis as to how disputes should be handled) and HMRC’s TP governance (which is more operationally focused and sets out the required process and working practices). Typically the most effective and cost-efficient risk management takes place prior to the CT return submission and the raising of a TP enquiry. This entails: conducting a regular TP policy review; raising the level of TP awareness within the organisation; incorporating TP standards into operating policies and procedures: and...
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