International Controlled Transactions Schedule (ICTS): a new UK transfer pricing reporting requirement for accounting periods commencing on or after 1 January 2027

What is the International Controlled Transactions Schedule (ICTS)?

The Finance Act 2026 includes legislation for the introduction of the International Controlled Transactions Schedule (ICTS), which will require multinational enterprises to report cross-border related party transactions in a standardised format as part of their annual tax return. This is mandatory and expected to apply to accounting periods commencing on or after 1 January 2027, with first submissions likely due in 2028. A technical consultation on the draft regulations is imminent.

ICTS at a glance

• What is it?: a standardised schedule filed with the annual corporate tax return detailing cross-border related party transactions including the nature of the transactions, transfer pricing methods and transaction values, etc.
• Expected to apply from: accounting periods commencing on or after 1 January 2027.
• Who will file it?: companies within the scope of UK corporation tax, UK permanent establishments of foreign corporations, and partnerships with a corporate partner within the scope of the UK’s transfer pricing legislation and with aggregate cross-border transactions above a specified threshold to be confirmed. SMEs remain exempt.
• Key risk: increased HMRC transfer pricing scrutiny and transfer pricing risk assessment on a real time basis.
• Action point: Use 2026 as a preparation year to review transfer pricing policies, assess transaction-level data availability, identify any reporting gaps, and ensure contemporaneous transfer pricing documentation and UK local files will support FY2027 ICTS reporting requirements.

Who will the ICTS apply to?

The introduction of the ICTS represents a significant change to the UK’s transfer pricing compliance and risk management framework. The ICTS is expected to be filed by companies within the scope of UK corporation tax, UK permanent establishments of foreign corporations, and to partnerships where there is a corporate partner, within the scope of UK transfer pricing rules, above a specific threshold.

Why the ICTS matters for UK businesses now

While ICTS is not expected to apply until 2027, it’s important to understand the implications now and prepare. The wider scope of ICTS is likely to increase compliance costs and administrative burdens, with HMRC estimating that around 75,000 businesses will be affected. The information reported will feed directly into HMRC’s automated risk assessment systems, as well as manual risk review processes, allowing HMRC to target compliance more effectively and reduce the length of transfer pricing enquiries.

What the ICTS means for UK tax and transfer pricing compliance

ICTS will require businesses to complete an additional schedule as part of their corporate or partnership tax return, as applicable. Critically, the information needed to complete the ICTS cannot be derived from the tax computation or statutory accounts alone. Instead, it is driven by transaction‑level transfer pricing data, supported by underlying accounting systems.

Information required under the ICTS reporting schedule

HMRC has published a draft template of the ICTS in Excel format, which indicates the level of detail that will be required. While not exhaustive, the draft template suggests that businesses will need to report transaction-level information including:

• Identification of the cross-border related-party transactions.
• Details of counterparties to each transaction and their country of incorporation or residence.
• The type of transaction and the transfer pricing policy applied.
• The transfer pricing method used and any relevant profit-level indicators.
• The percentage of any markups (gross/operating margins) relating to the relevant transfer price in point.
• Consistency with statutory accounts and wider group arrangements.

Why robust transfer pricing documentation is critical for ICTS compliance

From a practical perspective, the ability to complete the ICTS will depend heavily on the quality of a business’s UK focused transfer pricing documentation. In particular, a robust UK local file typically contains the transaction level detail needed to support the values, transaction descriptions and pricing methodologies disclosed in the schedule Without clear, up‑to‑date local documentation taxpayers will find it difficult to evidence the information reported, increasing the risk of inconsistency and subsequent HMRC challenge. Early alignment between the ICTS disclosures, the statutory accounts and transfer pricing documentation will be important in managing enquiry risk and potential penalties for inaccuracies, which depend in part on the taxpayer’s behaviour.

Why 2026 is a key preparation year for ICTS compliance

In light of these developments, 2026 should be treated as a preparatory year for in-scope businesses to organise the information required for ICTS disclosures. This is particularly important where controlled transactions have not previously been identified or priced. Undertaking a transfer pricing study, whether as a first-time exercise or an update of existing work, can help management identify risks and highlight areas of the transfer pricing policy that may need strengthening.

Why the UK local file is key to ICTS compliance

Practically, we recommend that a UK local file is the ideal starting point for in scope UK taxpayers to identify any gaps in the availability of their current data requirements to adequately prepare the ICTS. We recommend these are prepared for FY2026 as a precursor to ensuring all relevant information will be available for FY2027 ICTS reporting requirements, including the local file for that year.

ICTS next steps: HMRC consultation and draft regulations

HMRC is expected to publish a technical consultation on draft regulations imminently in Spring 2026, which should provide further clarity on the content and structure of the ICTS. The consultation is also expected to address transaction thresholds that will determine which businesses are required to complete the schedule. Based on the draft schedule, completing the ICTS will not be straightforward, further highlighting the need for businesses to maintain contemporaneous transfer pricing documentation.

How Saffery can support with ICTS readiness and transfer pricing compliance

Our transfer pricing team can assist your business with:

• Reviewing existing transfer pricing policies and identifying gaps.
• Designing and updating transfer pricing policies and UK local files.
• Preparing transfer pricing documentation to support ICTS disclosures.
• Advising on the practical requirements of the ICTS, including scoping, thresholds and readiness planning.

Our transfer pricing team has a wealth of experience and regularly works together with other Nexia member firms on multi-territory projects. If you would like to discuss ICTS readiness or transfer pricing documentation, please get in touch with Dawn Ross or Evan Tuck.