beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

International Manual

Transfer pricing: operational guidance: working a transfer pricing case: working the case

How a case is worked will be tailored to its individual facts and circumstances, but some activities will feature in every case.

Make a plan - and agree it with the business

The action plan for the case will draw upon the risk assessment to focus on the main issues. Creating the plan should be a collaborative process involving where possible the business and its advisers.

Case teams will need to think about what is to be done if progress stalls or if agreement cannot be reached. The plan will also identify the people and other resources to be deployed. It is important that the plan is reviewed to keep the case on track. See INTM481050 for more detailed guidance about action plans and progress reviews.

Gather information

Frequently, the most effective ways of understanding the business and placing its approach to transfer pricing in context can be to have a meeting with the business’s officers. If it’s not possible to make progress by dialogue, case teams will need to think carefully about information requests (see INTM483030 and INTM483040). Transfer pricing enquiries typically produce a large volume of complex material, so an effective way of managing the documents will be needed in order to locate specific information efficiently as and when it’s required. See INTM483030 for guidance on the documentation businesses should keep for transfer pricing purposes.

Case teams should not go straight into negotiations about a settlement without all parties first taking time to identify, understand and agree all the relevant facts and issues. Attempting to discuss a settlement when basic facts are not agreed is likely to lead to misunderstandings and delay, taking up more rather than less time and resource.

Assess the evidence

Case teams should examine evidence as soon as it’s received because new documents and information may help to resolve concerns identified in the risk assessment - or show that those concerns were fully justified. New evidence can indicate that the enquiry needs to focus on particular or different issues. This approach is particularly important if material is supplied in batches over a period of time.

Explain the conclusion

If the conclusion is that the transactions meet the arm’s length standard, then the case team can move on quickly to submit a resolution review (INTM481060) recommending settlement of the case without any transfer pricing adjustment to the returned profits.

If the conclusion is that the arm’s length standard is not met, the customer must be informed in writing of HMRC’s reasons for seeking an adjustment to profits under TIOPA10/Part 4. Their response and any counter-arguments advanced must be considered and, if appropriate, the scope for a negotiated settlement should be explored. Normally, this will take place at a meeting or series of meetings. No commitment as to how the case will be settled should be given.

HMRC’s Litigation and Settlement Strategy requires that each issue must be considered and resolved on its own merits.

Although enquiry cases may involve other concerns not related to transfer pricing, it’s important not to ‘trade off’ transfer pricing against other issues. HMRC is seeking to tax the appropriate arm’s length price and the settlement should reflect that. The arm’s length price should not be altered to take into account any offer from the business on other issues. Apart from the obligation of the business to meet all aspects of the UK statute, there would always be problems under any mutual agreement procedure where it might appear that the adjustment had been altered to reflect another tax issue.


In most cases it should be possible to resolve the case by agreement.

Before agreement is reached, case teams should ensure that they have obtained approval for the proposed settlement under the relevant HMRC governance procedures; see INTM481000 onwards.

The governance requirements can vary according to the nature and size of the issues. Case teams must ensure that they know the requirements for the case. In all transfer pricing cases, a resolution report must be made to the Transfer Pricing Panel or Transfer Pricing Board with recommendations as to how the case should be resolved.

In most cases, the Transfer Pricing Panel or Transfer Pricing Board is likely to approve settlement in line with the recommendations in the resolution report. In other cases they may authorise settlement within a different set of parameters which the HMRC case team will take into negotiations (see INTM483070).

When the settlement is authorised, HMRC will write to the business and any adviser to confirm the agreement and its terms (see INTM483090).