INTM917450 - DRAFT The International Controlled Transaction Reporting Regulations: Regulations Part 5 - Initial Period
This guidance is in draft. It covers the International Controlled Transaction Reporting Regulations 2026 (‘the Regulations’), which were laid before the House of Commons on 4 November 2026. HMRC aims to publish the ICTS notice on 26 November 2026 (when the Regulations come into force), and detailed guidance on the ICTS notice in this manual by 31 December 2026, prior to the reporting requirement coming into effect from 1 January 2027.
HMRC recognises that the ICTS is a new reporting requirement and that businesses may need time to establish and embed the systems and processes necessary to meet their obligations. When considering whether a penalty is appropriate, HMRC will consider all the circumstances of the particular case, including the reasons for any failure and whether the entity has a reasonable excuse.
For ICTS filings relating to accounting periods or underwriting years beginning on or after 1 January 2027 and before 1 January 2028 when considering whether an entity has a reasonable excuse for any failure to provide specified information or has taken reasonable care where there has been an inaccuracy HMRC will give particular weight to the fact that businesses are making their initial ICTS submissions during the introduction of the new reporting requirement.
Where an entity first becomes subject to the ICTS reporting requirement in a later accounting period, the fact that it is making its first ICTS submission will also be a relevant consideration. However, the weight given to this may reduce as the ICTS reporting requirement becomes established and businesses have had greater opportunity to understand and prepare for the requirements.
These considerations do not provide an automatic exemption from penalties. HMRC will consider the particular facts and circumstances of each case and may charge a penalty where appropriate, including where there has been deliberate non-compliance or other aggravating factors.