UK: Updated transfer pricing guidelines for compliance
Two new sections were added covering value chain analysis and offshore procurement hubs.
HM Revenue & Customs (HMRC) in December 2025 updated its guidance to help with common risks in transfer pricing approaches (GfC7).
The guidance GfC7 clarifies HMRC’s expectations for compliance with the UK transfer pricing rules and provides practical steps that taxpayers can take to meet these expectations. While not mandatory, the guidelines are intended to improve voluntary compliance and have informed HMRC’s approach to assessing transfer pricing risk and assessing behavioural factors relevant to the exercise of powers relating to six-year extended discovery assessments and penalties for non-arm’s length pricing.
Since originally issuing GfC7 in September 2024, HMRC has continued its work on additional guidelines in the area of transfer pricing. As a result, two new sections were added to GfC7 covering value chain analysis and offshore procurement hubs.
- Value chain analysis (VCA): Part 2 of GfC7 covers common compliance risks and HMRC have inserted a new subsection on value chain analysis. The purpose of the new section is to set out HMRC’s view on why and how a VCA can enhance the quality and reliability of transfer pricing analysis, in what circumstances a VCA is most likely to add value, and what HMRC consider best practice approaches and pitfalls when conducting a VCA.
- Offshore procurement hubs: Part 3 of GfC7 covers indicators of transfer pricing policy design risk, and HMRC have inserted a new section on offshore procurement hubs. This is focused on situations when overseas group companies are charging UK entities for performing procurement services.
Read a January 2026 report prepared by the KPMG member firm in the UK