INTM489325 - The Unassessed Transfer Pricing Profits Practical Guidance: Early Engagement
Source: gov.uk (2025-12-04)


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 (https://www.gov.uk/hmrc-internal-manuals/international-manual/intm489500)

Companies potentially in scope of UTPP will require more detailed risk assessment, which will involve HMRC approaching the company for additional information and analysis.

HMRC’s preferred approach is to work collaboratively with companies in order to gain an understanding of their global arrangements. Companies can expect transparency and continued engagement. HMRC encourages companies to share information and work to resolve transfer pricing issues before the potential issue of a UTPP preliminary notice.

Active engagement between HMRC and a company involving full co-operation and disclosure towards resolving the transfer pricing issues includes:
- complete transparency over the global arrangements,
- interaction with a realistic prospect of a successful conclusion within a reasonable time frame and not just a continuation of exchanges of views and/or the provision of information and documents from the customer, and
- genuine progression towards agreement on the appropriate quantum of the adjustment to settle the transfer pricing issues
Where a company is not fully cooperating HMRC may consider issuing a preliminary notice based on the information available.

The UTPP process is not designed to be used where there has been no previous engagement with the customer, and as such a UTPP preliminary notice should never come as an unexpected development. Furthermore, the introduction of UTPP is not intended as an opportunity to revisit arrangements which have already been addressed under DPT, or to extend enquiry time limits for routine transfer pricing issues.

For LB customers, initial engagement between a company and HMRC should be conducted through the company’s CCM, with support from a LB International Tax Specialist as necessary. The CCM may have an initial discussion with company about their cross-border transactions to understand the company’s position on the potential application of UTPP.

For MSB customers, initial engagement with a customer in respect of UTPP will be through the caseworker with support from the MSB Profit Diversion Technical Co-ordinators as listed in INTM489355 (https://www.gov.uk/hmrc-internal-manuals/international-manual/intm489355).

Initial Discussion Contents

For the purposes of an initial discussion, companies should set out their understanding of the relevant facts and application of UTPP to their circumstances. It is helpful if the customer provides copies of any supporting material they have, which will aid HMRC’s understanding of the arrangements, such as presentations and internal explanatory papers and any financial analysis to support their own judgements with respect to any UTPP analysis, where relevant. This information will be shared with the LB international Tax Specialists, or MSB Profit Diversion Technical Co-ordinators.

The CCM or caseworker may ask questions to clarify factual matters and obtain further information but unless they are confident that the transactions discussed do not present a risk for UTPP they should not give any opinions on the application of UTPP without first consulting the LB international Tax Specialist, or MSB Profit Diversion Technical Co-ordinator.