Speed Read: Significant changes have occurred in both the tax and the wider economic environment and HMRC have revised its thin cap guidance to take into account these developments. Quantitative 'rules of thumb' (e.g. 1:1 debt to equity) are generally replaced by a more traditional transfer pricing approach based on analysing the business plan, comparables, industry sector, economic environment and commercial rationale for debt financing. The revised guidance clarifies HMRC's stance that thin cap is an area that warrants greater scrutiny through a detailed transfer pricing examination of the facts and circumstances of each individual taxpayer.