Start with scope, then data. A UK company with overseas related-party transactions should establish whether the proposed International Controlled Transactions Schedule (ICTS) applies before building a new reporting process.
What has been decided, and what remains draft?
The government has decided to introduce ICTS. Section 48 of Finance Act 2026 gives HMRC the power to make the implementing regulations. That enabling legislation does not itself settle the detailed reporting requirements.
The technical consultation ran from 16 June to 31 July 2026 and is now closed. As at 28 September 2026, GOV.UK still publishes the regulations, HMRC notice and reporting template as drafts. We have not identified final implementing regulations or a final notice in the official sources checked.
The intended start remains accounting periods beginning on or after 1 January 2027, subject to the final implementing rules. HMRC’s published timetable envisages laying the statutory instrument in late 2026 and publishing the notice by the end of 2026. These are planned next steps, not confirmation that either has been issued.
Does every UK subsidiary need to file?
No. The draft design concerns specified cross-border controlled transactions. Transactions exempt from transfer pricing would generally be outside reporting unless the permanent establishment condition applies. Assess the SME exemption and other conditions using the relevant tax definitions and wider group facts. A small UK turnover figure alone does not establish exemption.
What should the group controller collect?
- A legal ownership chart identifying the UK entities, overseas counterparties and branches.
- A reconciled schedule of intercompany services, goods, royalties, financing and guarantees.
- Amounts by transaction type and counterparty, with the source ledger and currency identified.
- Current agreements and the evidence supporting the pricing method.
- An explanation of differences between local accounts, group reports and tax computations.
Where does preparation usually become difficult?
A management charge may be recorded as one year-end journal while the supporting services, allocation basis and overseas counterparties sit in separate files. Reconstructing that analysis at the filing deadline creates avoidable work. Agree who owns the calculation and how each figure traces back to the records.
Completing a schedule does not demonstrate that the transfer pricing is correct. Pricing policies and supporting evidence need their own review. Equally, an exemption from this reporting requirement should not be treated as an exemption from every international tax obligation.
A proportionate preparation plan
| Step | Useful output |
|---|---|
| Confirm scope | A documented entity-by-entity assessment with assumptions and exemptions. |
| Map the data | A list of required fields, systems and missing information. |
| Resolve responsibility | Named contacts in UK finance, group tax and overseas finance. |
| Recheck final rules | An update to the assessment when regulations, notices and filing arrangements are finalised. |
Avoid committing to software solely on the consultation’s illustrative spreadsheet. HMRC states that the Excel example does not determine the eventual IT design.
Sources and further guidance
For the wider UK engagement, see UK subsidiary audit, accounts and group reporting.
Discuss your next step
Bring your latest accounts, ownership structure and a summary of the transactions or changes you need to assess. We can agree the appropriate scope and any specialist input required. Discuss your corporation tax position
Official position checked on 28 September 2026. The consultation has closed, but the detailed rules remain draft. Recheck the final regulations, HMRC notice and implementation guidance before relying on particular reporting requirements. General guidance; advice should reflect your group’s circumstances.