CFM98490 - Interest restriction: administration: reporting requirements: appointment of replacement by HMRC

TIOPA10/SCH7A/PARA5

There are circumstances where HMRC may appoint a reporting company to replace an existing company, whether that company was appointed by the group or HMRC. This power (in TIOPA10/SCH7A/PARA5) is primarily designed to ensure satisfactory compliance with the interest restriction legislation. The power can be exercised at any time.

Either of two conditions must be satisfied:

• HMRC considers that the existing reporting company has not or will not comply with a requirements of TIOPA10/SCH7A; or
• The existing reporting company has agreed that HMRC should exercise this power.

The replacement company appointed by HMRC must have been a UK group company for some part of the period of account for which the original reporting company was appointed. The appointment is for a single period of account only and does not carry over to subsequent periods of account. Therefore the group would need to make a timely appointment of a reporting company for subsequent periods.

It is possible that a group might ask HMRC to replace its reporting company for a period of account after the expiry of the twelve-month time limit for revocation of an appointment in PARA2(4)(a). This might happen where a reporting company previously appointed has left the CIR group and there are no satisfactory arrangements in place with the purchaser of the reporting company that would enable it to continue its reporting company functions. Except in cases of non-compliance, the existing reporting company must agree to its replacement.

Requests should be made to the group’s HMRC Customer Compliance Manager, or by email to: msbcorporateinterest.restrictionmailbox@hmrc.gov.uk