Finance Bill 2025-26 contains changes to the UK transfer pricing framework that most practitioners haven't fully absorbed yet. Several take effect from 1 January 2026.

The Diverted Profits Tax is gone. In its place: Unassessed Transfer Pricing Profits (UTPP) a new charge embedded directly into the corporation tax framework. Same intent, different mechanism, and a different dispute process.

UK-to-UK related-party transactions are now excluded from transfer pricing where there's no risk of UK tax loss. Long overdue a genuine compliance saving for domestic groups.

The big new burden: the International Controlled Transactions Schedule (ICTS), mandatory from January 2027. Every cross-border related-party transaction above £1 million must be disclosed in a standardised schedule filed with your tax return. HMRC has been explicit that this data feeds directly into its risk-scoring system.

HMRC recovered nearly £2 billion from TP and DPT activity in 2023-24. With better data, that number will climb.