ICTS transfer pricing: A five question checklist to prepare

Previously, we looked in detail at HMRC's ICTS reporting framework and the information businesses may be required to disclose.

As the consultation develops, many businesses are now asking a more practical question: Should businesses start preparing for ICTS transfer pricing before 2027?

While the first ICTS filings are not expected until 2028, many businesses will need sufficient time to assess whether their existing systems, processes and governance arrangements can support the new ICTS reporting requirements.

Based on discussions with our clients, this is their biggest challenge, whether the necessary data required for ICTS can be identified, extracted and reported efficiently.

Five questions every business should ask to prepare for ICTS transfer pricing

1. Which businesses will be in scope for ICTS?

The first step is understanding whether your business is likely to fall within the ICTS reporting regime and then to understand the transaction thresholds which apply to your group size.

While many groups already comply with UK transfer pricing requirements, ICTS introduces a separate reporting obligation that may require significantly more transactional detail than what businesses currently prepare for annual compliance purposes.

An early scope assessment can help businesses understand the potential impact of the regime and prioritise resources appropriately.

2. What information will businesses need to report under ICTS?

Many businesses have never attempted to extract transfer pricing data in the format proposed by HMRC.

Key questions include:

• Can the required information be extracted from existing systems?
• Is transaction data recorded consistently?
• Can information be linked to the relevant counterparties and transaction categories?
• Are the required financial metrics readily available?

Identifying data gaps now will provide valuable time to address issues before reporting becomes mandatory.

3. Should a business test how an ICTS submission would work in practice?

One of the most effective ways to prepare is to undertake a trial ICTS exercise using FY25 or FY26 data.

A trial run can help businesses understand:

• What information can currently be extracted.
• Where manual intervention is required.
• Whether additional data fields may need to be captured from 2027 onwards.
• The level of effort required to prepare an ICTS submission.

This practical exercise will likely uncover issues that would not be identified through a high-level review alone.

4. Should a business review transfer pricing policies, governance and processes ahead of ICTS?

ICTS is likely to increase the importance of robust transfer pricing governance and ensuring that transfer pricing policies remain accurate, supportable and aligned with current business operations.

Businesses should consider:

• Whether existing transfer pricing policies remain appropriate, defensible and up to date.
• Whether any historical policies, assumptions or arrangements require review or amendment.
• Who will own the reporting process?
• How data will be gathered and validated?
• Whether existing controls are sufficient.
• How ICTS reporting will align with transfer pricing documentation and tax compliance processes.

Taking the opportunity to review both transfer pricing policies and supporting governance frameworks now can help identify gaps, strengthen audit readiness and reduce future compliance burdens once ICTS reporting becomes a requirement.

5. Why is it important for a business to create a clear ICTS roadmap before 2027?

Waiting until 2027 or 2028 to begin implementation will create unnecessary time pressure.

Developing a readiness roadmap now can help businesses prioritise actions, allocate responsibilities and ensure key milestones are achieved before the regime takes effect.

For many, a phased approach will be the most efficient way to manage implementation.

Book a complimentary ICTS readiness review today

If you are considering what ICTS means for your business, we are offering a complimentary two-hour ICTS readiness discussion to explore your likely reporting obligations, identify potential data and systems challenges, and discuss practical next steps for preparation.

Email our team for details