How To Avoid Common Pitfalls In Transfer Pricing

HMRC recently issued guidelines on how to avoid common pitfalls and follow what HMRC considers to be best practice in transfer pricing compliance. The guidelines contain a detailed description of HMRC's perception on the role of "UK risk leads" and "transfer pricing specialists". The compliance guidelines also highlight HMRC's view of common indicators of high-risk approaches to transfer pricing policies.

HMRC's stated aim is to "reduce uncertainty" by:

• providing greater clarity of HMRC's expectations as to how a UK business should manage its transfer pricing compliance risk (through the roles of UK risk leads);
• raising awareness amongst transfer pricing specialists of HMRC's expectations in the context of functional analysis, comparability analysis and documentation; and