Guidance

Corporate Interest Restriction on deductions for groups

Find out if your group will need to send a Corporate Interest Restriction return.

Groups deducting more than £2 million a year

Your interest deductions may be restricted if your worldwide group is:

  • subject to UK Corporation Tax
  • expecting to deduct more than £2 million a year in net tax-interest and other financing costs

Your worldwide group will be able to appoint a reporting company and send a Corporate Interest Restriction return.

A worldwide group consists of the ultimate parent company and any consolidated subsidiaries.

You can find more information about worldwide groups in CFM95310.

Your group’s net tax-interest amount is its tax-interest expense minus tax-interest income.

You can find more information about how to work out your group’s net tax-interest amount in CFM95600.

Groups deducting £2 million or less

You don’t need to take any further action. However, you must keep any documents that show that your group won’t deduct more than £2 million in net tax-interest and other financing costs.

If your group’s interest deductions aren’t restricted in the current year, you can still appoint a reporting company and send an abbreviated return.

Your group can then carry forward unused interest allowance from that year to use in the future. You can only carry forward unused interest allowance from years that your group sent a return.

How to appoint a reporting company and send a return

Your deadlines will depend on your group’s period of account. If you need to send a return you’ll have until at least 31 March 2018 to appoint a reporting company from your group.

How to notify HM Revenue and Customs (HMRC) of the appointment of a reporting company

You can download and complete the worksheet.

Worksheet for the appointment of a reporting company

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Fill out the form to notify HMRC of the appointment of a reporting company and upload the worksheet.

The reporting company will then have until at least 30 June 2018 to send the return.

You can also revoke the appointment of a reporting company.

Where a reporting company has been appointed, it must inform the relevant group companies of its status.

How to submit a full or abbreviated interest restriction return

The reporting company can download and complete one of the following worksheets dependent on the type of return that needs submitting and the size of the group. More information about using the templates is held within the worksheets.

Abbreviated interest restriction return

This file is in an OpenDocument format

Fill out the form to submit your interest restriction return and upload the appropriate worksheet.

Read the Corporate Interest Restriction guidance for definitions of terms including the ‘core rules’ and glossary.

Elections outside of a return

An election allows you to choose a particular way of having your company’s or group’s tax treated.

Corporate Interest Restriction elections can either be made:

  • within a full or abbreviated interest restriction return‎
  • outside of an interest restriction return

Read the Corporate Interest Restriction guidance to find out more about interest restriction returns and elections.

Send any elections outside of the interest restriction return to your Customer Compliance Manager (CCM). If you don’t have a CCM send it to:

Customer Engagement Team
WMBC
Euston Tower
286 Euston Road
London
NW1 3UQ

Singleton companies

The new Corporate Interest Restriction rules don’t only apply to groups, they can also apply to singleton companies.

Further information

Read the guidance, or contact your group’s HMRC Customer Compliance Manager.

Published 21 December 2017
Last updated 9 April 2018 + show all updates
  1. The postal address to send elections outside of the interest restriction return has changed.
  2. Guidance on how to submit full or abbreviated Corporate interest restriction Returns has been added.
  3. The Google worksheet for appointment of a reporting company has been replaced with an Excel worksheet.
  4. Updated with information on how to make an election outside of a return.
  5. This guidance has been updated to include details of how to appoint a reporting company.
  6. First published.