Policy paper

International controlled transactions schedule (ICTS)

Published 26 November 2025

Who is likely to be affected

The following businesses will potentially be affected to the extent that they have relevant cross-border related party transactions or dealings:

• UK resident businesses within scope of the transfer pricing legislation
• UK resident businesses with a foreign permanent establishment
• foreign businesses with a UK permanent establishment
• advisory firms, representative bodies, and legal firms

General description of the measure

The government is introducing legislation giving the Commissioners for Revenue and Customs the power to introduce regulations requiring in-scope multinationals to file an International Controlled Transactions Schedule (ICTS).

Transfer pricing is a means of pricing transactions between connected parties, based on the internationally recognised arm’s length principle. That principle seeks to determine what the price would have been if the transactions had been carried out under comparable conditions by independent parties.

In the UK, as in other major economies, transfer pricing is a major focus of tax compliance activity. Transfer pricing enquiries are typically complex and fact-intensive and can take considerable time and resource to resolve. Transfer pricing documentation provides tax authorities with information facilitating both pre-enquiry risk assessment and the enquiry process.

The ICTS is expected to be an annual filing requirement that captures specific factual information about relevant cross-border related party transactions in a standardised format. The information would be used for automated risk profiling and manual risk assessment by HMRC compliance teams, prior to the opening of enquiries.

Policy objective

The ICTS would facilitate automated, data-led risk assessment by HMRC, permitting more accurate identification of transfer pricing risk. It would increase efficiency by promoting tax compliance at the earliest opportunity and reducing the length of transfer pricing enquiries. Taxpayers would benefit from shorter, better targeted enquiries from HMRC that are focused on cases where adjustments to transfer pricing are required.

This measure is intended to:

• improve fairness — ensuring multinational enterprises pay tax on profits generated from economic activity in the UK
• increase efficiency — meaning that HMRC compliance activity can be more effectively targeted, benefiting compliant taxpayers

Background to the measure

In the Corporate Tax Roadmap 2024, the government committed to a policy consultation in spring 2025 on the introduction of a requirement for multinationals to report cross-border related party transactions to HMRC.

That consultation closed on 7 July 2025. A summary of responses to that consultation is being published at the same time as this tax information and impact note, as part of Budget 2025.

The government will carry out a technical consultation on draft regulations in spring 2026.

Detailed proposal

Operative date

The commencement date for the ICTS filing obligation will be given in future regulations that will detail the full requirements and final design of the measure. It is expected that the obligation will take effect for accounting periods beginning on or after 1 January 2027.

From the date of Royal Assent of Finance Bill 2025-26, the Commissioners for His Majesty’s Revenue and Customs will be authorised to issue the regulations.

Current law

The UK transfer pricing legislation is contained within Part 4 Taxation (International and Other) Provisions Act 2010 (TIOPA 10).

The UK legislation on chargeable profits of a non-UK resident company carrying on a trade in the UK through a permanent establishment is contained within chapter 4 of Part 2 Corporation Tax Act 2009 (CTA 09).

The UK legislation on profits of foreign permanent establishments of UK resident companies is contained within chapter 3A of Part 2 CTA 09.

(None of the above legislation would be changed by the proposed new legislation included in Finance Bill 2025. It is included here as context for the ICTS only.)

Proposed revisions

The legislation creates a power for the Commissioners for His Majesty’s Revenue and Customs to issue regulations requiring certain taxpayers to file an International ICTS.

The regulations will be issued as secondary legislation, to follow the primary legislation.

Such regulations will determine the detailed design of the ICTS, including the:

• specified transactions to be included
• commencement date of the filing obligation
• form and manner in which information is to be provided

Summary of impacts

Exchequer impact (£m)

2025 to 2026	2026 to 2027	2027 to 2028	2028 to 2029	2029 to 2030	2030 to 2031
+0	+25	+105	+150	+245	+350

These figures are set out in Table 4.1 of Budget 2025 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Budget 2025.

Macroeconomic impact

This measure is not expected to have any significant macroeconomic impacts.

Impact on individuals, households and families

There is no impact on individuals as this measure only affects businesses.

Equalities impacts

This measure only affects businesses, therefore it is not anticipated that there will be disproportionate impacts on those in groups sharing protected characteristics.

Administrative impact on business including civil society organisations

This measure will have a significant impact in aggregate across the population of approx. 75,000 businesses who are in the scope of UK transfer pricing, permanent establishment, and foreign permanent establishment legislation as they will be required to file an ICTS with HMRC.

One-off costs could include familiarisation with the changes and implementation of suitable systems and processes for data collection. Continuing costs will include the resource required to gather the relevant data in each period. The proposal is expected to be broadly aligned with similar overseas requirements and is intended thereby to mitigate additional administrative burdens by requiring the reporting of readily available information.

These costs have been estimated on an aggregate basis across all in-scope groups.

This measure is not expected to disproportionately impact civil society organisations.

Estimated one-off impact on administrative burden (£ million)

One-off impact	(£ million)
Costs	6 million, across 75,000 businesses

Estimated continuing impact on administrative burden (£ million)

Continuing average annual impact	(£ million)
Costs	2 million, across 75,000 businesses

We expect that many taxpayers will benefit from fewer, shorter, better targeted enquiries from HMRC as a result of this measure. This measure is expected overall to impact businesses’ experience of dealing with HMRC as the change requires certain taxpayers to file an ICTS. HMRC will carry out technical consultation on the detailed design of the ICTS and will advise of the requirements on businesses once the design is finalised (prior to implementation).

Operational impact (£ million) (HMRC or other)

Changes to HMRC IT systems will be required, with estimated costs of £6 million over the scorecard period. Operational resource impacts are still being assessed.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

The measure will be monitored and assessed alongside other measures in the government’s International Tax reform package including reform of UK law relating to transfer pricing, permanent establishment and Diverted Profits Tax.

Further advice

If you have any questions about this change, email tp_scope_and_documentation@hmrc.gov.uk or contact:

Jennifer Buchanan: 03000 570200

Steve Edge: 03000 547300

Lewis Field: 03000 537808

James Thompson: 03000 0528617