Transfer pricing

FORTHCOMING CHANGE relating to UK transfer pricing legislation: At Autumn Budget 2024, and following a consultation on updating UK transfer pricing legislation (as well as legislation relating to the diverted profits tax and to permanent establishments), the government announced that it will be publishing a second-round consultation on reforms to modernise and simplify those rules in spring 2025. The government confirmed that this will include the potential removal of UK-to-UK transfer pricing to reduce the UK compliance burden. Consultations will also be launched in spring 2025 on further changes to the UK transfer pricing rules, including around lowering the existing thresholds for medium-sized businesses and introducing a new filing obligation for in-scope multinationals. The government will also be reviewing the transfer pricing treatment of cost contribution arrangements, where the costs and benefits of developing intellectual property are shared by group companies, and rectifying a current gap in the legislation relating to Advance Thin Capitalisation Agreements (for which legislation has been included in Finance Bill 2025). See News Analysis: Autumn Budget 2024—Tax analysis, Analysis—Reform of the UK’s international tax laws: a step closer (2024): Tax Journal, Issue 1652, 18 and

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Latest Tax News

Tax weekly highlights—21 November 2024

This week's edition of Tax weekly highlights includes: (1) the Supreme Court decision in Refinitiv concerning the interaction between the diverted profits tax and an advance pricing agreement, and (2) the Supreme Court decision in Cobalt Data Centre on the scope of the enterprise zone allowance.

UT finds FTT made errors when setting aside HMRC best judgment assessment (HMRC v Sintra Global)

Tax analysis: In Sintra Global, the Upper Tribunal (UT) set aside the decision of the First-tier Tax Tribunal (FTT) insofar as it related to a notice HMRC had issued to an individual making him liable for the payment of a civil evasion penalty charged against a company he was a director of. The UT found that the FTT had failed to follow the guidance provided by the Court of Appeal in Pegasus Birds in relation to the assessment the penalty was based on.

Supreme Court rules on the scope and limitations of the enterprise zone tax incentive (R (oao Cobalt Data Centre) v HMRC)

The Supreme Court unanimously dismissed the taxpayers’ argument that the relevant expenditure fell within section 298(1) of the Capital Allowances Act 2001 (CAA 2001) and concluded that, based on the proper interpretation of that provision, the expenditure was not incurred under a contract executed prior to the conclusion of the initial ten-year period, as required. Adam Craggs, partner at RPC, discusses the implications that the judgment has on taxpayers going forward.

Consultation on expanding tax conditionality to new sectors

Environment analysis: On 30 October 2024, HM Revenue and Customs (HMRC) issued a consultation on ‘Tackling the hidden economy: expanding tax conditionality to new sectors’. The consultation runs to 21 January 2025. Angus Evers, partner at Shoosmiths, comments on the consultation.