CFM98560 | Interest restriction: administration: reporting requirements: revenue determinations

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

TIOPA10/SCH7A/PARA56, 57

HMRC may make a determination under TIOPA10/SCH7A/PARA56 where HMRC considers that a group may be subject to a CIR disallowance, one of the conditions (see below) is met.

A determination gives rise to disallowances of net tax-interest expense even though no interest restriction return (IRR) has been filed. Typically, the purpose of a determination is to trigger the submission of an IRR. This power is similar to that in FA98/SCH18/PARA36 in relation to failure to file a company tax return.

If an IRR has been submitted but HMRC considers that it is inaccurate, HMRC should open an enquiry into that IRR rather than issue a determination. Similarly, if a reporting company becomes aware of an error in an IRR, it may submit a revised IRR, within the time limit allowed. This is likely to be much more efficient than having all UK group companies subject to a CIR disallowance amend company tax returns in accordance with TIOPA10/S376.

The conditions are:

• HMRC has appointed a reporting company or replacement reporting company, but no IRR has been submitted for the period of account by the filing deadline; or

• There is a reporting company, an IRR has been submitted for the period of account, but it does not meet the requirements of PARA20, see CFM98430.

The determination deadlines are set out in PARA56(9). In the case of a failure of a reporting company to submit a revised IRR, the deadline is within 12 months of the PARA8(5) time limit. Otherwise, no determination notice under PARA56 may be made more than three years after the filing date for the IRR.

The determination is made on a company-by-company basis, rather than as a single determination for the group as a whole.

HMRC must determine, to the best of its information and belief, a UK group company’s pro-rata share of the group’s CIR disallowance and, where necessary, its allocation between accounting periods. If the allocation of CIR disallowance to a company accounting period is not £zero, the company must leave out of account tax-interest amounts equal to that allocation.

HMRC must send a notice of determination to each affected UK group company and also to the reporting company.

Where a notice of determination is given under PARA56, a company is treated as having amended its company tax return in accordance with the determination (PARA70(2)).

A determination notice issued by HMRC may result in either increased or decreased taxable profits for a group company. For example, HMRC must allocated any disallowance on a pro-rata basis, so if no IRR has been submitted, and one group company had previously left out of account the whole CIR disallowance calculated at group level, this company is likely to have its allocated disallowance reduced by the determination (even if the total disallowed amount has increased).

An IRR (which may include a revised IRR) may be submitted following a determination either:

• within the normal time limit (36 months after the end of the period of account or, if later, three months after the appointment of a reporting company) or,

• if later, up to 12 months after the notice (PARA57).

For HMRC’s power to make determinations under PARA58 following an issue of a closure notice, and a reporting company’s failure to submit an IRR in accordance with that closure notice, see CFM98870.

Periods ending before 31 March 2026

For periods ending before 31 March 2026, where a reporting company was appointed either by the group or HMRC, it was obliged to file an interest restriction return. For such periods, HMRC could also issue a determination where a reporting company had been appointed by the group and no interest restriction return had been submitted.