The latest statistics published by HM Revenue and Customs show a strengthening of Transfer Pricing enforcement and measures against base erosion in the United Kingdom during the 2024–2025 period.
This approach is part of a risk-based compliance strategy that prioritizes the allocation of resources toward transactions and taxpayers with the highest tax exposure.
The data reflects a notable increase in revenue collection and a more proactive strategy in monitoring the operations of multinational groups.
Increase in Transfer Pricing Revenue
One of the key findings is the significant increase in the so-called transfer pricing yield, which reached £3.387 billion in 2024–2025, nearly double the amount from the previous year.
This result reflects a more proactive approach by the UK tax authority (HMRC), which combines audits, real-time interventions, and preventive mechanisms such as advance pricing agreements.
Active enforcement and longer audit durations
During the same period, 143 audit cases were resolved, maintaining a stable trend in the number of interventions. However, the average duration of these processes reached 41 months, highlighting the growing complexity of transfer pricing cases.
This context demonstrates that authorities are prioritizing more in-depth reviews, especially in high-risk cross-border transactions.
Relevance of APAs and resolution mechanisms
Advance Pricing Agreements (APAs) remain a key tool for providing certainty to taxpayers. During the period analyzed, 26 APAs were agreed upon, with a reduction in the average resolution time to approximately 44 months.
Meanwhile, Mutual Agreement Procedures (MAP) also show positive results, with 115 cases resolved and resolution times below the global average, positioning the United Kingdom as an efficient jurisdiction in eliminating double taxation.
Developments in Measures Against Base Erosion
The United Kingdom continues to strengthen its tools against profit shifting. In this context, the Diverted Profits Tax (DPT) has played a significant role in incentivizing changes in the behavior of multinational companies.
Since its implementation, this measure has helped secure over £10.5 billion in additional revenue. However, it has been announced that it will be replaced by a new regime called Unassessed Transfer Pricing Profits (UTPP) starting in 2026, which will maintain the focus on correcting structures that divert profits.
Implications for Multinational Groups
Statistics reflect a clear trend toward a more controlled and sophisticated environment in the audit of Transfer Pricing in the United Kingdom. In this context, companies should consider:
- An increased risk of audit in cross-border transactions
- The importance of having robust and up-to-date documentation
- The strategic use of mechanisms such as APAs to reduce uncertainty
- The need to align structures with economic substance
Conclusion
The increase in tax revenue and the evolution of enforcement tools demonstrate a more rigorous approach by the UK regarding transfer pricing. It is essential that multinational groups strengthen their
policies and documentation, ensuring compliance with the arm’s length principle and anticipating potential tax risks.
TPC Group, as a consulting firm specializing in transfer pricing with international experience, assists organizations in evaluating their structures, implementing efficient strategies, and complying with constantly evolving regulatory requirements.
Source: GOV.UK