D1.1470 Corporate interest restriction (CIR)—penalties

Corporate tax
Corporate tax | Commentary

D1.1470 Corporate interest restriction (CIR)—penalties

Corporate tax | Commentary

Corporate interest restriction—penalties

D1.1470 Corporate interest restriction (CIR)—penalties

Special rules for penalties have been created to deal with the corporate interest restriction (CIR) regime as a consequence of the worldwide-group focus of the majority of the provisions. In addition, CIR creates tax responsibilities in relation to the detailed workings of the regime which has required the development of bespoke penalties.

Penalty for failure to deliver return

The reporting company is liable to a penalty for failure to deliver a return by the due date of twelve months after the end of the period of account of the worldwide group, or three months after the reporting company was appointed, if later.

The penalties are as follows1:


    •     £500 for a return which is delivered within three months of the filing date


    •     £1,000 for a return in any other case

HMRC must assess the penalty and notify the company no later than 12 months after the filing date. The penalty is due for payment within 30 days unless appealed by notice to the notifying officer within that period.

Reasonable excuse—late filing penalties

No late filing penalty will be imposed where the reporting company has a reasonable excuse for missing the filing deadline for corporate interest restriction returns, provided the return is submitted within a reasonable time after the excuse ends2.

In order to reduce the administrative burden on groups, HMRC will accept that there is a reasonable excuse where a majority of companies within a CIR group have obtained a deferral to late filing penalties for

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