Taxation (International and Other Provisions) Act 2010 section 171

Tax returns where transfer pricing notice given

Section 171 sets out the rules governing how and when a taxpayer may amend their tax return after receiving a transfer pricing notice, and how this interacts with HMRC's ability to close an enquiry.

• A taxpayer who receives a transfer pricing notice has 90 days to amend their tax return to comply, starting from the date the notice is given or, if appealed, the date the appeal is finally resolved or abandoned.
• HMRC cannot issue a closure notice on the relevant tax return until the 90-day period expires or the taxpayer amends the return sooner to comply — though a partial closure notice on unrelated matters is not restricted.
• Small or medium-sized enterprises that have not opted in to transfer pricing rules and are not otherwise excepted from the SME exemption should prepare their tax returns ignoring the arm's length pricing adjustments that would otherwise apply.
• However, if a transfer pricing notice is subsequently issued to such an SME, and the taxpayer fails to amend their return within the 90-day window when they should have done so, the return is treated as incorrect.