Background 

The CIR limits the amount of tax relief available to companies and groups for interest and other financing costs. The rules allow the group to appoint a RC to submit a group-level interest restriction return (IRR).  

It had been HMRC’s practice to appoint a RC for a group where the group had not done so by the deadline. However, in June 2023, HMRC announced that it would only continue to do this in limited circumstances. As a result of concerns raised by professional bodies, including ICAEW and others, HMRC has now reconsidered its approach. 

Periods ending after 31 March 2024 

HMRC says that for accounting periods ending after 31 March 2024, the group should make sure it has validly appointed a RC before it submits an IRR, and that it should retain a record of having done so. HMRC’s guidance at CFM98485 continues to apply for those periods. 

Where it is unclear whether a valid RC has been appointed, HMRC’s advice is for the group to submit a new valid RC appointment. Where the company appointed is different to the company that previously submitted IRRs, the group should first revoke the appointment of the previous RC.   

HMRC says that it “will not view the appointment of a reporting company for a period ending after 31 March 2024 as any indication or admission that there was not a validly appointed reporting company for previous periods”. 

HMRC’s approach to earlier periods 

The position for earlier periods depends on whether, on 31 March 2025, HMRC was in time to appoint a RC in respect of the period concerned.   

This would be the case for: 

• accounting periods ending on or after 31 March 2021; and 
• earlier periods where there was an open enquiry for a company in the group under corporation tax self-assessment.  

HMRC would not have been in time for periods ending before 31 March 2021 unless there was an open enquiry. 

Earlier periods: HMRC was in time  

HMRC says it will not pursue the specific point that the group’s failure to appoint a RC could invalidate its IRR. This means that the group can rely on the interest restriction allocation set out in the IRR. HMRC may still use its compliance powers to enquire into other aspects of the IRR.  

HMRC will contact groups that have an open dispute about RC status. Where the group had accepted that HMRC could not appoint a RC, the group is asked to contact HMRC “where there is a tax impact” so that HMRC and the group can work together to find a mutually agreeable position. Groups should not contact HMRC about this issue in any other circumstances (ie, where there is no tax at stake).  

Earlier periods: HMRC was not in time 

HMRC is still considering its position for cases where it had identified that no RC had been appointed but, as at 31 March 2025, HMRC was out of time to appoint a RC. HMRC says that it is “not specifically looking to enquire into issues about reporting company status for these periods”.  

Contacting HMRC 

Groups with questions about how the above will work in practice are asked to contact their customer compliance manager or to email HMRC's dedicated mailbox. Any questions around HMRC’s change in approach should be sent to msbcorporateinterest.restriction@hmrc.gov.uk.  

Further information 

• How to improve the corporate interest restriction | ICAEW
• TAXguide 08/18: the corporate interest restriction | ICAEW
• Restriction on corporation tax relief for interest deductions - GOV.UK 
• CFM98420 - Interest restriction: administration: reporting requirements