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HMRC internal manual

International Manual

Transfer pricing: operational guidance: working a transfer pricing case: dealing with the initial response

Response to information request

The response to the information request provides an opportunity to review early progress on the case.

  • Does the information provided help to make progress towards an informed judgement on whether the transfer pricing is at arm’s length? More information may be needed to clarify the position and a further information request can be unavoidable. But case teams must make sure that unnecessary information is not requested and, just as importantly, that they are confident that they will know what to do with any new information when it is provided (see INTM483040).
  • Does the information help to focus the case on worthwhile areas? Focus does not necessarily mean that the scope of the case should be narrowed: it may be concluded that all areas are still worth pursuing. But in most cases it should be possible to identify key transactions and concentrate on them. It may be helpful to refer again at this stage to earlier chapters of this manual.

The information received will often include a transfer pricing report. See INTM484000 onwards for guidance on examining such reports.

If the business has not provided all the documents and information requested, the case owner should review any information or representations it has received and consider whether missing items are needed. Is their absence an obstacle to resolving the issues on which it has been decided to focus? Has the business explained why they are missing or proposed another way to provide the information or assurance the case team has sought? If the case owner is not satisfied with these explanations or proposals, and they conclude that the missing items are still needed, they will need to consider the use of formal information powers.

See the Compliance Manual at CH20000 onwards for technical guidance and CH220000 for operational guidance on information powers.

Where information provided in the initial response (or at any point in the case) leads to the conclusion that a discovery assessment for a transfer pricing adjustment may be appropriate, remember that a Commissioners’ sanction (see INTM483090) will be required.