Following discussions with UK tax advisors and professional bodies, HMRC have confirmed that for Corporate Interest Restriction (CIR) periods of account ending between 31 March 2021 and 31 March 2024 (inclusive) a filed Interest Restriction Return (IRR) is not invalidated in a scenario where the group has failed to submit a valid reporting company notification. This is a welcome relaxation in HMRC’s approach demonstrating that they have listened to the concerns raised.
For CIR periods of account ending after 31 March 2024, HMRC will continue to apply a much stricter approach as described in our earlier article. This means it will be important for CIR groups to ensure they have a valid reporting company appointment in place for each period of account. It is anticipated that HMRC will be unlikely to assist taxpayers with resolving reporting company notification errors going forward (except in exceptional circumstances).
HMRC remain of the view that the appointment of a reporting company is part of the self-assessment process, and it is the group’s responsibility to comply with administrative requirements. It is recommended going forwards that proof of a valid reporting company appointment is retained on file alongside each submitted IRR. Consideration should be given to making a protective appointment if: there is insufficient evidence of such a valid appointment; there is any uncertainty on whether the appointment remains valid; or in cases where confirming the validity of the appointment would result in significant effort.
If you need any assistance with this or have questions on HMRC’s approach, please speak to the authors or your usual KPMG in the UK contact.