Late filing penalties for Interest Restriction Returns

07 December 2020

HMRC has advised that, although it does not have the discretion to provide any extension to the statutory filing deadline for an Interest Restriction Return (IRR), which is 12 months following the end of the period of account, no filing penalty will be applied in scenarios where the reporting company had a reasonable excuse for missing the deadline. The IRR must subsequently be filed within an acceptable time after the reasonable excuse ends.

HMRC has received queries relating to how it will interpret reasonable excuses where the filing deadline for an IRR is the same as that for company tax returns, and companies within the CIR group have requested deferrals to CT late filing penalties. An IRR can be filed using estimated figures, meaning that reporting companies should proceed with filing the IRR on time, if possible. To reduce the administrative burden on groups, HMRC will accept that where most companies within a CIR group have obtained a deferral to late filing penalties for their company tax returns, if the IRR is filed by the same agreed date, there is a reasonable excuse for the late filing.

Where a reporting company cannot meet the IRR filing deadline, they should liaise with their Customer Compliance Manager (CCM) if they have one. Where the group does not have a CCM, and they believe they have a reasonable excuse for late filing of the IRR, they should include this information when they file the IRR. HMRC can then consider this prior to any late filing penalty being issued, which will reduce the administrative burden for both parties. When considering if there is a reasonable excuse for late filing of the IRR, HMRC has access to all of the relevant facts and circumstances.


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