CFM98520 | Interest restriction: administration: reporting requirements: obligation to make a return and time limits

This page of guidance applies for periods of account ending on or after 31 March 2026 unless otherwise stated. See the bottom section for periods ending before that date.

TIOPA10/SCH7A/PARA7, 7A

Where a reporting company is appointed by HMRC, and is not a replacement reporting company, it is required to submit an interest restriction return. If a reporting company is a replacement reporting company and no interest restriction return has by that time been submitted for a period of account, it takes on an obligation to submit an interest restriction return.

The return must be submitted by the filing date. This is the later of:

• Twelve months from the end of the period of account; or

• Three months after the appointment of the reporting company by HMRC.

Further, the return is of no effect unless received by HMRC before the later of:

• Thirty-six months from the end of the period of account; or

• Three months after the appointment of the reporting company by HMRC.

There are exceptions to this as follows:

• In cases where a return has to be submitted in response to a closure notice and PARA50 applies, the return must be received within three months of the closure notice if it is to be effective. This overrides the limits in PARA7.

• Where a determination has been made by HMRC under PARA56, the return has effect if received within twelve months of the determination being made, despite the normal time limits.

• PARA7A may extend the time limit in the event of a takeover of a group to twenty-four months after the beginning of a period of account, it this is later than the date that would otherwise apply.

Where the ultimate parent of a group becomes a member of another group, for instance following a takeover, its group ceases to exist and a period of account comes to an end. Where this is earlier than the date to which it and its subsidiaries draw up accounts, those accounting periods will end less than twelve months before the end of the period of account. This can cause practical difficulties; not only will apportionments be necessary but also the single entity accounts may not yet be available.

Where PARA7A applies, the filing date for the old group's interest restriction return is the filing date that would have been expected for a twelve-month period of account straddling the takeover date. The extension is intended to reduce the need to estimate amounts relating to company accounting periods straddling the takeover date.

The reporting company for the old group will retain its obligation to deal with CIR matters such as revised returns or enquiries relating to the old group for periods when it was reporting company of the old group, even though it has become a member of a different group.

Periods of account ending before 31 March 2026

For periods ending before 31 March 2026, a reporting company appointed by the group was required to file an interest restriction return for each period of account, whether or not the group was subject to an interest restriction.