TPcases

Database of Transfer Pricing Case Laws

HMRC Guidance on the Narrowing of the Arm’s Length Range and Adjustments to the Median

Category: Other Documents, Other Legislation and Guidance, Transfer Pricing News | Tag: Arm's length interval, Arm's length range, Central tendency, Comparability defects, Comparables search, Falls outside the arm's length range, Interquartile range (IQR), Median, Sizeable number of observations, Statistical tools

On 24 November 2025, HMRC released new operational guidance on the use of benchmarks, the narrowing of the arm’s-length range, and adjustments to the median.

If the HMRC determines that a taxpayer’s transfer pricing results in outcomes that fall outside the arm’s-length range, it will adjust the pricing, and according to the new guidance, the median is likely to be the most appropriate basis for making these adjustments.