CATA–Europe 2nd Knowledge Sharing Call: UK’s Practical Perspective on Large Transfer Pricing Audits successfully held on 24 June 2025

The Commonwealth Association of Tax Administrators (CATA) successfully hosted its second Europe Knowledge Sharing Call on 24 June 2025. This virtual session provided a deep dive into HM Revenue & Customs’ (HMRC) approach to managing large transfer pricing (TP) audits, offering participants valuable insights into the UK’s practical experience and strategic frameworks in this complex area of international tax.

The session featured two speakers from HMRC with many years of experience of TP audit work,  who delivered a detailed presentation on the UK’s approach to handling high-risk TP cases involving multinational enterprises. Their contributions shed light on the key challenges, and evolving practices in ensuring compliance with international transfer pricing rules.

The Purpose and Scope of the session aimed to demystify how HMRC approaches large and complex TP audits. Participants were guided through both the strategic and operational aspects of TP auditing, with a strong emphasis on real-world experience and multi-functional collaboration.

The presentation focused on TP audits with significant risk and complexity—often involving multinational enterprises—and illustrated HMRC’s audit journey across planning, governance, execution, and resolution.

Participants were shown how TP audits have delivered significant tax yield for HMRC. The session shared quantitative examples that highlighted the financial and compliance impact of well-executed TP investigations.

The speakers emphasised HMRC’s risk-led strategy, including case selection and early engagement frameworks designed to set a clear direction for each audit. They highlighted the role of internal governance—through structured reviews and audit signoffs, outlined as critical in ensuring consistency and proportionality in HMRC’s approach. The speakers described the cooperative compliance model, where transparency and timely dialogue between tax authorities and taxpayers form the foundation of effective audits. The UK’s Litigation and Settlement Strategy (LSS) was presented as a guiding framework to facilitate principled and timely case resolution. This, together with the internal governance framework, promotes fairness, avoids unnecessary litigation, and seeks to deliver sustainable audit outcomes.

Finally, the speakers drew from their own operational experience, outlining how HMRC addressed common hurdles in TP audits, and effective approaches for working with taxpayers and their advisers, to progress TP audits to a principled and evidence-based resolution.

Looking ahead:

CATA is grateful to HMRC for their openness in sharing insights, this session reaffirmed the value of peer learning in navigating the increasingly complex world of transfer pricing. We look forward to hosting future technical calls to continue supporting capacity development in tax administration across the Commonwealth.