UK Budget 2025

Overview

As part of the 2025 Autumn Budget announcements, the UK Government confirmed that it will introduce legislation requiring certain multinational enterprises to file an annual International Controlled Transactions Schedule (ICTS). The ICTS will require in-scope groups to disclose detailed information on their cross-border related-party transactions, forming a new layer of transfer pricing transparency and reporting.

This measure follows the Spring 2025 consultation, which included a draft template setting out the type of information HMRC expects to collect.

 

What will the ICTS include?

HMRC has already released a draft template of the ICTS, which indicates the type and depth of information taxpayers will need to disclose. The current draft requires, for each category of controlled transaction (such as sale of goods, provision of services, franchise fees and royalties), the identification of the counterparty, transfer pricing or valuation methodology applied, profit-level indicators used, net book value of relevant assets, income and expenses. The draft also includes a dedicated section on cost contribution arrangements (covering balancing payments, buy-ins, buy-outs and contributions), and also a strong focus on intra-group financing.

Regulations will set out the final design of the ICTS, including the:

• Categories of specified cross-border related-party transactions to be reported;
• Level of detail required; and
• Accounting periods and filing process.

The Government’s current expectation is that the ICTS will apply to accounting periods beginning on or after 1 January 2027.

The filing obligation will only apply to multinationals with cross-border dealings above a specified materiality threshold (with GBP1 million suggested during consultation).

 

Administrative Impact

The Government anticipates that the ICTS will be a significant new compliance requirement, estimating that around 75,000 taxpayers will fall within scope.

The proposal echoes the 2021 consultation on an International Dealings Schedule, which was ultimately abandoned due to concerns over administrative burden. It remains to be seen how HMRC will address those concerns when designing the new ICTS framework.

A technical consultation on the draft regulations is expected in Spring 2026.

 

What should businesses do now?

Although the measure is not expected to take effect until 2027, multinationals should begin considering:

• Whether the materiality thresholds could bring them into scope;
• The readiness of their systems to extract data on cross-border related-party transactions at the level of granularity likely to be required;
• Governance processes for transfer pricing data, documentation and consistency across filings;
• Potential interaction with UK transfer pricing documentation requirements, CbCR and global minimum tax (Pillar Two) reporting.

 

How DLA Piper can help

DLA Piper’s transfer pricing team can support multinationals in assessing likely ICTS impacts, preparing for data-readiness reviews, and engaging in the 2026 technical consultation process.

Contact us if you would like to further discuss this development.