CFM98645 - Administration: UK group company: time limits for amending CT returns and interactions with other regimes

TIOPA10/SCH7A/PARAS 8(3), 70

Normally a reporting company can submit a revised interest restriction return (IRR) at any time up to 36 months after the end of the worldwide group’s period of account - PARA8(3). A later date may apply if a reporting company is appointed by HMRC at a late stage or in certain scenarios where an IRR has been under enquiry.

To the extent that the submission of the IRR has the effect that information on a company tax return for a relevant accounting period is incorrect, for instance because the amount of allocated restriction has changed, the company is obliged to amend its company tax return. The time limit for doing this is the later of three months from the submission of the revised IRR, or the normal time limit for amending a company tax return in FA98/SCH18/PARA15(4), which is normally 24 months after the end of the accounting period 12 months after the normal filing date for the return

It follows that the submission of a revised IRR may cause a company tax return to be amended later than might otherwise have been the case. At this point, the time limit for making other consequential changes that the group might have liked to make may have expired. For instance it may be too late to make a group relief claim because the time limit in FA98/SCH18/PARA74(1)(a) - normally 24 months after the end of the claimant company’s accounting period - may have been passed, see CTM97045.

It is possible for the settlement of an enquiry into the company tax return of a UK group company, not connected to the group’s interest restriction position, to impact the group’s CIR position, with the effect that the group’s IRR is incorrect. The reporting company is then obliged to submit a revised IRR by TIOPA10/SCH7A/PARA8(4). It has three months to do so. Consequential changes to the company tax returns of UK group companies need to be made within three months of the submission of the revised IRR - PARA70(1A). It may then be too late for companies not directly subject to the company tax return enquiry to make further changes to group relief, etc.

There are provisions that may permit certain consequential claims to be made where a company tax return enquiry is settled. These are found at FA98/SCH18/PARA65 (general) and 74 (group relief). However these provisions do not come into play where settling a company tax return enquiry into one company has an indirect effect on the tax position of a different member of the group, in consequences of changes to the group’s CIR position .

The reporting company will be required to submit a revised IRR for the group to take account of the outcome of the company tax return enquiry - TIOPA10/SCH7A/PARA8(4). If another UK group company’s CIR disallowance is changed, it must amend its company tax return - PARA70. But this does not trigger the consequential relief provisions in FA88/SCH18. So, for instance, it may be too late for that other company to change its capital allowances or group relief position.

For guidance on late claims to group relief, etc. see CTM97050+.

Where an amendment has reduced the amount a company may surrender as group relief to less than the amount previously surrendered, amendments may be required or assessments made under SCH18/PARAS 75-76.

For consequential claims etc. on the settling of an enquiry into an IRR, see CFM98880.