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On-line tool: Step 3 - Small enterprise exemption

In order to avoid disproportionate compliance costs for smaller companies, there is an exemption from the UK transfer pricing rules for small-sized enterprises. There is also an exemption for medium-sized enterprises, but this is not as beneficial, so it make sense to consider the small-sized exemption first.

There are three stages to applying this exemption:
  1. Determine the taxpayer's "group".
  2. Check that the small enterprise exemption applies to the transaction you are looking at.
  3. Check whether the taxpayer is below the specified thresholds.
Stage 1 - The group

The exemption would more aptly have been named the small group exemption, because whether a taxpayer is "small" is not measured by reference to the attributes of the taxpayer on a standalone basis.  Rather, it is necessary to amalgamate the taxpayer with other associated entities.  Let's refer to these companies as the taxpayer's "group".

So, first of all you need to work out which entities are to be included in the group.

Click here to do so.







The 'small print'

The comments on this page and elsewhere on this website are of a general nature.  It is not practicable in a general review such as this to consider every convolution of the UK transfer pricing rules or of any other tax law that may be relevant.  Moreover, these pages naturally do not take into account the specific facts relating to any particular taxpayer.  Therefore, although the guidance in this website should give a good indication of the likely position under the transfer pricing rules, taxpayers should obtain professional advice to verify the position, or carry out their own analysis.

Neither TPS nor its affiliates and employees make any representation regarding the completeness or accuracy thereof and they accept no responsibility for any loss or damage incurred as a result of any user acting or refraining from acting upon anything contained on these pages or upon its omission therefrom.
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Introduction

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