INTM489320 - The Unassessed Transfer Pricing Profits Practical Guidance: Initial UTPP Risk Assessment
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)

HMRC will routinely consider UTPP as part of wider risk assessment of transfer pricing and other international risks. This will use information already held by the department and public source information. It will also consider any information and analysis provided by the company as a result of real time engagement.

Where specialists determine the company to be low risk of having unassessed transfer pricing profits and there is already discussion with the company about the applicability of UTPP, HMRC may communicate to the company that no further engagement on UTPP is currently planned.

If it cannot be determined whether there is a high or low risk of arrangements being within the scope of UTPP, HMRC may contact the company for additional information and analysis to establish the position.

Those companies presenting the greatest risks will require more detailed risk assessment and investigation. HMRC’s preference will be to work openly and cooperatively with the company. HMRC will want to evaluate and address other profit-shifting risks at the same time as considering whether the company is in scope for UTPP. This is an efficient way for HMRC to deploy its resource while at the same time considering a company’s compliance costs and providing more certainty than a piecemeal approach.

A risk assessment of the application of UTPP will not be influenced by the customer’s overall Business Risk Rating.

Information Sources

Public source information will include published accounts and other public documents (for example US filings such as the SEC 10-K) which can contain useful information about the group’s structure and the level of its sales and profits in particular markets. Furthermore, the accounts of non-UK group companies in regional hub jurisdictions can be read using a commercial database and might provide a useful indication of whether and to what extent contrived and artificial arrangements to circumvent the UK’s transfer pricing rules have been used.

In addition to using information already available, HMRC continues to work closely with other tax administrations to exchange information under the terms of its tax treaties, including with its partners in the expanding JITSIC network, to address tax avoidance and aggressive tax planning across borders. This will inform HMRC's approach to administering UTPP and to applying other countermeasures to profit shifting such as transfer pricing, targeted anti-avoidance rules or other legislation.

HMRC will not as a matter of routine ask customers to supply information to demonstrate that they are not within the scope of UTPP until an initial risk review has been carried out and there is good reason to consider that the transfer pricing position is incorrect and therefore UTPP may apply.