INTM489220 - The Unassessed Transfer Pricing Profits Process: Representations following a Preliminary Notice

UTPP will apply to accounting periods beginning on or after 1 January 2026.  This guidance will be updated with detailed examples by 1 January 2026.  For earlier accounting periods please use the diverted profits tax guidance at INTM489500

TIOPA10/S217G

The company has 30 days beginning with the day on which the designated officer has issued the preliminary notice to send written representations to HMRC. This is 30 calendar days as opposed to 30 working days.

The preliminary notice is considered to be issued on the date that a hard copy leaves HMRC. This will usually be treated as a couple of working days after it is signed.

HMRC is required to consider representations made on the following grounds before assessing the unassessed transfer pricing profits:

  • there is an arithmetical error in the calculation of profits stated in the preliminary notice 
  • there is an error in a figure on which an assumption in the preliminary notice is based 
  • the provision does not have an ETMO for the accounting period to which the profits relate, and/or 
  • the unassessed transfer pricing profits arise wholly from excepted loan relationships

Companies may make representations on wider grounds, and HMRC may take account of such information to ensure that the position is just and reasonable.

However, there is no legal requirement for HMRC to consider representations made on wider grounds before an assessment is made. Given that HMRC may have as little as 30 days to consider representations before issuing a UTPP assessment, it may only be possible for HMRC to fully consider more complex arguments during the period for amendments.

Transparent Entities

Where the preliminary notice sets outs that the provision is treated as having an ETMO because the other party is a transparent entity as defined in 217D(6), then the company has 60 days from the issue of the preliminary notice to send written representations on the basis that there is no ETMO to HMRC. This is to allow the company sufficient time to collect the relevant information from the other party on the tax position of its members/ partners. This extended time limit does not apply to representations made on any other basis.