Transfer pricing disputes in the United Kingdom

Introduction The experience of the United Kingdom in transfer pricing disputes is striking. On the one hand, due to the age of its income tax system, the United Kingdom has some of the earliest legislation that can be seen to have been addressed against transfer pricing. On the other hand, despite now having very modern legislation on transfer pricing, there are very few recorded transfer pricing disputes. Until the introduction of the modern rules in 1999, this appears to have been due to the strong administrative role played by the Inland Revenue as the tax authority at the time. To some extent, a similar attitude, accepting administrative contacts as the appropriate means to resolve transfer pricing disputes, appears to have persisted since then. However, there are signs that taxpayers are now more willing to litigate transfer pricing disputes, although it seems that cases are still mostly resolved before any judicial hearing.