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ARTICLE · 09 SEPTEMBER 2026

Tribunal Limits HMRC's Schedule 36 Powers In Transfer Pricing Case

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When HMRC issued an information notice demanding a UK subsidiary's US parent company financial statements in a transfer pricing enquiry, the First-tier Tribunal had to determine whether such documents were reasonably required and whether the subsidiary had the power to obtain them. The case examines the boundaries of HMRC's information-gathering powers and the practical limits of corporate group relationships.

European UnionTax
Jasprit Singh
Jasprit Singh

In Lifeplus Europe Ltd v HMRC [2026] UKFTT 797 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal against an information notice issued by HMRC, as the information requested by HMRC was not reasonably required to check the taxpayer's tax position and the taxpayer did not have the information in its power or possession.

Background

Lifeplus Europe Ltd (LEL) is a wholly owned UK subsidiary of Eurark LLC (EL), a company incorporated in the US. EL specialises in the manufacture and distribution of vitamins, nutritional supplements and healthy body products, which it manufactures in the US. LEL is EL's appointed distributor for products sold into the UK, EU and Switzerland.

Following a transfer pricing analysis performed by its external advisor, LEL implemented a transfer pricing policy in 2014 applying the Transactional Net Margin (TNM) method, reflecting its characterisation as a routine distributor.

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