In our recent experience, disputes over the transfer pricing of “high-value” intragroup services are increasingly becoming a key area of focus for HMRC. Given the nature of the UK economy, which is based around high-value services, it is unsurprising that HMRC is sharpening its attention in this area.

HMRC’s 2024 guidance on best practices to manage common transfer pricing risks makes it clear: transfer pricing for “above market” and potentially other value-driving intragroup services - especially when priced on a cost-plus basis - is firmly in the spotlight and flagged as a high-risk indicator. This is a strong signal of HMRC’s intent to challenge and scrutinise these arrangements more closely.

Please see HMRC’s guidance.

Although the OECD has not yet published a formal proposal, we are aware from recent presentations made by senior OECD personnel at the International Fiscal Association’s Lisbon tax congress (October 2025) that new guidance on transfer pricing for high-value services is also in development, through revisions to Chapter VII of the OECD Transfer Pricing Guidelines (OECD TPG). The revisions to Chapter VII could bring the OECD’s approach more closely in line with HMRC’s current stance.

Why does this matter?

Chapter VII of the OECD TPG specifically covers the transfer pricing of intragroup services. The proposed update from the OECD is expected to provide further guidance on the application of pricing methods other than the cost-plus methodology when remunerating high-value services. Examples given of high-value services include cloud computing and other IT services. However, other services that are seen as critical and/or value-driving may also fall within the scope of the revisions.

It is also likely that we will see further guidance from the OECD on how companies should analyse transfer pricing arrangements relating to workers operating across jurisdictions, particularly those contributing to the development of intangibles and the management and control of risks.

Updates to the guidance are likely to include more illustrations and worked examples to help provide greater clarity on the application of the guidance set out in Chapter VII, which in turn should help to reduce the number of lengthy tax disputes arising on such issues.

We will be watching to see how the OECD’s proposed revisions to Chapter VII will interact with the guidance issued by HMRC.

When can we expect the new guidance?

We’re expecting a discussion draft of proposed changes to be released in Spring 2026. In the meantime, businesses with a UK provider of cross-border intragroup services should start to review their transfer pricing arrangements, and consider their place in the group’s value chain, in anticipation of what is to come.

If you’d like to discuss any of these insights or have other transfer pricing questions, please get in touch.