CFM98535 | Interest restriction: administration: reporting requirements: required revised returns and time limits

Where a revised return is required 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: [email protected] {#}

Revised return required

There are certain circumstances in which a revised return is required. One is where a member of a CIR group amends or is treated as amending an amount contained in a company tax return. If this causes a change to the numbers in a submitted interest restriction return, the reporting company must submit a revised return.

In addition, for periods of account beginning on or after 1 April 2023, where a figure in an interest restriction return has ‘become incorrect’ for any reason, the reporting company must submit a revised return.

A figure might ‘become incorrect’ as a result of a contract settlement following a HMRC enquiry. To cause figures to ‘become incorrect’, there must have been some event, such as a closure notice, or re-filed accounts.

However, an interest restriction return would not ‘become incorrect’ following a legislative change where the interest restriction return was previously submitted in accordance with the legislation that applied at that time (and the legislative change does not have retrospective effect).

Where a revised return is required under PARA8(4), the extent of the revisions must be limited to correcting the amounts that have become incorrect.

The revised return must be submitted within:

• 3 months of the ‘relevant day’, or

• Such later time as HMRC may allow.

The ‘relevant day’ is defined as:

• Where the figures in the interest restriction return have become incorrect as a result of a company tax return being amended or treated as amended, the date on which those figures are finally determined (for example, at the end of an appeal against the final closure notice), or

• Where the figures have become incorrect for another reason, the date that the figures were discovered to be incorrect.

HMRC may only allow a later time where it is expected that the reporting company may be required to submit another revised return as a result of an existing open enquiry into a company tax return.

Where a revised return, submitted in accordance with PARA8(4) or PARA50, affects the figures in subsequent returns, the reporting company must also submit revised returns for the affected periods of account.

For example, a group is required to submit a revised return for the period ended 31 December 2019. The original interest restriction return showed unused interest allowance to carry forward of £10m, which has all been utilised in the period ended 31 December 2020. The revised return for 31 December 2019 shows unused interest allowance to carry forward of £2m, and so the return for 31 December 2020 must also be revised to reflect this change.

Where a revised return is required to be submitted by a company but it is not submitted within the time limit, the company may be liable to late filing penalties (PARA29). In such a circumstance, HMRC may issue a determination (PARA56(5A)).

There may be circumstances where a reporting company is required to submit a revised return under PARA8(4), but it is also within time to voluntarily submit a revised return under PARA8(2). The deadline for the PARA8(4) revised return is not changed, and the reporting company will be liable for late filing penalties if this deadline is not met.

However, if at a later date, the company submits a revised return within the deadline for a PARA8(2) revision, that return will still have effect. This return should include the corrections required by PARA8(4).