INTM450050 - Transfer pricing records: when to provide the specified transfer pricing records

HMRC may ask for the specified transfer pricing records informally and the records may be provided to HMRC upon request as part of a collaborative approach to tax compliance. Requests for the records may be made to support risk assessment activity or as part of a formal enquiry into a return.

HMRC can also use its formal information powers (see CH20200) to require relevant persons (see INTM450030) to provide the specified transfer pricing records within a reasonable period of time (FA08/SCH36/PARA7).

The specified transfer pricing records must be provided within the period stated in the information notice. HMRC considers that 30 days will generally be a reasonable period for the specified transfer pricing records, consistent with other information or documentation (see CH23420).

Failure to comply with an information notice may result in a monetary penalty, chargeable on the relevant person, that includes an initial penalty of £300 and daily penalties up to £60 a day (see CH26100 and CH26620). 

An information notice to provide the specified transfer pricing records may be issued at any time for the sole purpose of obtaining the records (FA08/SCH36/PARA21(8A)).

The issuing of a formal notice to provide the specified transfer pricing records is not restricted to occasions where there is an open enquiry into a return. Additionally, there is no requirement for HMRC to have concerns that there is an under assessment of tax before issuing a notice outside of an enquiry (FA08/SCH36/PARA21). Therefore, a formal notice may be issued, for example, as part of the risk assessment process. 

The earliest HMRC will issue a notice to provide the specified transfer pricing records is the filing date for the return to which the records relate. This aligns with the 2022 Transfer Pricing Guidelines best practice that the Local File be finalised no later than the due date for the filing of the tax return for the period in question, and the Master File be reviewed and updated by the return due date for the ultimate parent of the MNE group.

It is therefore important that entities within scope of the legislation prepare their specified transfer pricing records in a timely manner so that relevant persons can comply with any information notices within a reasonable period – normally 30 days. If a relevant person is required to keep the specified transfer pricing records but has failed in their obligation, we still expect the relevant person to respond to the information notice within the 30 days to advise that the records are not available.   

The specified transfer pricing records form part of the statutory records in the context of HMRC’s formal information powers and it therefore follows that a relevant person cannot appeal against a notice to provide a Master File and/or Local File (FA08/SCH36/PARA29(2)).  

In cases where HMRC requests the specified transfer pricing records for a period for which the relevant person is not obliged to keep and preserve a Master File and Local File, the response to the notice should confirm this. We recommend that, in addition to confirming that the relevant person is not required to keep the records, the response should also advise of the reasons why the transfer pricing records requirement does not apply and include supporting documentation or information to evidence any analysis undertaken to arrive at its conclusion.