Automation of Interest Restriction Return - initial equality impact assessment
Published 29 December 2020
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Project objectives
The Corporate Interest Restriction (CIR) legislation became effective from 1 April 2017. It applies to corporate entities and aims to restrict a group’s deductions for interest expense and other financing costs for Corporation Tax purposes to an amount that is commensurate with taxed UK activities taking account of how much the group borrows from third parties such as banks and other finance options.
A digital portal on GOV.UK exists to enable groups to appoint a group reporting company that submits the group level tax Interest Restriction Return (‘IRR’) that captures the relevant information.
Large companies and corporate agents have requested an improved solution providing as much automation as possible negating transposition errors along with the need to manually check and amend calculations before submission.
The Automation of Interest Restriction Return (AIRR) project is seeking to provide an improved and automated digital process to fully meet essential user needs for making and revoking group company appointments and submitting IRRs. The project will also provide HMRC access to Corporate Interest Restriction data for compliance activity, policy and reporting purposes.
Customer groups affected
The customer groups that will be impacted by the change are an estimated 3,800 companies, including large and medium-sized businesses
What customers will need to do
HMRC is updating the way IRRs are submitted and includes a new online form plus the option of an Application Programme Interface (API) to automate much of the data collection. The revised solution will enable large companies and corporate agents to reduce their current admin burden and help speed up the submission process.
The new AIRR service will be accessed through GOV.UK where Government Gateway credentials will be required to appoint the reporting entity and separately make Corporate Interest Restriction submissions. A file upload function will also be available through an AIRR API.
We aim for the new service to be available from autumn 2020, there will be a private beta launch during development allowing customers to test and inform the development of the new service.
Assessing the impact
We assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty; and section 75 of the Northern Ireland Act:
- racial groups
- disabled and not disabled
- gender
- gender reassignment
- sexual orientation
- age
- religion or belief
- pregnancy and maternity
- marriage and civil partnership
- people with dependents and those without
- political opinion (for Northern Ireland only)
We do not anticipate that there will be impacts on customers within any of the protected characteristic groups. Extra support will be provided as required.
Opportunities to promote equalities
We have considered opportunities to promote equalities and good relations between people in each of the protected characteristic groups and those outside of that group. None have been identified within the scope of this project.