CFM98530 - Interest restriction: administration: reporting requirements: revised returns and time limits

TIOPA10/SCH7A/PARA8-9

The CIR legislation allows groups considerable flexibility to revise interest restriction returns over an extended period. It is expected that these revisions will mainly have the effect of changing allocations of disallowances or reactivations within the group, and that the calculation of group-wide figures will rarely need revising.

However, the group-wide figures may need to be revised where there are UK group companies whose CT accounting periods are not coincident with the group’s period of account. Estimates may be included in an interest restriction return for later revision and finalisation.

Where a revised return is permitted, but the reporting company for the relevant period of account is no longer a member of the group, the group should contact its HMRC Customer Compliance Manager, or send an email to: msbcorporateinterest.restrictionmailbox@hmrc.gov.uk {#}

Revised return permitted

Where a reporting company has submitted an interest restriction return, TIOPA10/SCH7A/PARA8 permits the reporting company to submit a revised return.

There is no limit on the number of revised returns that may be submitted.

A revised return is an interest restriction return in its own right, rather than an amendment of an earlier return, and the other administrative provisions are applied on that basis. It supersedes any previous return. A revised return may be a full return even if it supersedes an abbreviated return. The elections made may differ from those in a previous return unless this is otherwise not permitted. So, a group may elect to change from using the fixed ratio to the group ratio (or vice versa), but if the original return contained an irrevocable election, this cannot be revoked in a revised return.

Any revised return must indicate the manner in which it differs from the previous return.

The time limit for submitting a revised return reflects the time limits within which a return may be regarded as having effect, that is:

• Thirty-six months from the end of the period of account; or
• Three months after the appointment of the reporting company by HMRC.

An officer of Revenue and Customs may treat a revised return as having effect after these time limits have expired where the revisions made give effect to the replacement of estimates by final figures (PARA 27(6)).

Extended time limit

An extended time limit (PARA9) applies in situations where the reporting company has submitted an interest restriction return for the period, whether an abbreviated return or a full return, and the group is not subject to an interest restriction the period. Here the reporting company can submit a full interest restriction return for the period within five years of the end of the period.

This extension allows groups to delay deciding on whether to make a full interest restriction return for a period, in order to carry forward unused interest allowance. The five-year time limit aligns with the five-year expiry of interest allowances being carried forward.