United Kingdom

united-kingdom

The UK Tax Authority (HMRC), has released new guidance for senior staff managing transfer pricing risks, referred to as “risk leads,” and specialists. This document helps risk leads, such as tax compliance managers or finance directors, understand their responsibilities in managing tax risk.

Specialists, who are tax professionals, receive advice on identifying and mitigating risks. The guidance emphasizes the importance of keeping detailed records to ensure compliance and reduce uncertainty during tax inquiries. It is important to mention that it does not change the existing transfer pricing policies. Instead, it offers practical advice on risk areas and maintaining real-time information and suggests creating a “supporting information file” for documentation.

This guidance is to be considered alongside future legislative changes in UK tax law.

On September 12, 2024 the UK Tax Authority and Customs (HMRC) launched a consultation on additional draft guidance for the Pillar Two Multinational Top-up Tax (MTT) and Domestic Top-up Tax (DTT). This guidance addresses several important issues, including the application of MTT and DTT to accounting periods starting on or after December 31, 2023.

In addition, it clarifies that taxpayers in the U.K. are subject to the MTT if they are the responsible party within a qualifying multinational group, corporation, or partnership. The guidance further explains the transitional safe harbor rules, with certain exceptions for fully domestic groups. Additionally, it confirms that DTTs delivering similar results as Pillar Two are classified as Qualifying Domestic Minimum Top-up Taxes (QDMTTs). Comments are open until October 23, 2024.

To access the details and specifics of the additional draft, click here.