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B4.180 Transfer pricing enquiries, penalties and appeals

Transfer pricing is part of the corporate tax self assessment regime and therefore the corporate tax return should reflect transfer pricing arrangements that satisfy the arm's length principle and comply with UK transfer pricing law. The return will be reviewed by HMRC for transfer pricing risks as part of the overall business risk review performed on any tax return, see A6.102. If the corporate tax return is submitted on time HMRC will have 12 months from the statutory filing date¹ to raise a transfer pricing enquiry, this may be alongside enquiries into other aspects of the return or as an enquiry solely into transfer pricing.

Once an enquiry has been raised there are two main HMRC policies which set out the framework governance for the conduct of the enquiry, these are:

1. Ìý

   •ÌýÌýÌýÌý transfer pricing operational guidance or transfer pricing governance, which is set out from INTM480000 onwards, and

2. Ìý

   •ÌýÌýÌýÌý litigation and settlement strategy² (LLS)

The LSS applies to all tax disputes and therefore