CFM98475 - Interest restriction: administration: reporting requirements: appointment of a reporting company by group: TIOPA10/SCH7A/PARAS1-3
The following sets out the position for periods of account ended on or after 31 March 2026. For details of the rules for earlier periods, please see CFM98470.
TIOPA10/SCH7A/PARAS1-3
In most cases where the corporate interest restriction (CIR) may be applicable, a group will choose to appoint a reporting company. The reporting company will be responsible for submitting the group’s Corporate Interest Restriction return (IRR), and for dealing with HMRC in relation to that return for the period in question.
Conditions for appointment
The reporting company must be:
· an eligible company (liable to UK Corporation Tax and non-dormant)
· authorised by more than 50% of the eligible companies
Authorising companies
The reporting company submitting an IRR may bind members of the group (albeit subject to safeguards) and therefore must have the necessary authority from the group members which are supporting the appointment of the reporting company.
For example, the group finance director, head of tax, or members of the tax team within a group may already have the authority to act on behalf of companies in the group in certain respects. Depending on the terms of this authority, this may be sufficient such that the individual can authorise the appointment of the reporting company on behalf of UK group companies in question.
On the other hand, it may be that no one individual has the existing authority to give the authority on behalf of all the UK group companies (for example, if there are significant minority interests in some of the subsidiaries). In such circumstances, a more formal approach may be appropriate to ensure that there is an individual who has explicit authority to bind each company. What internal process is acceptable is a matter for the group and the officers of any subsidiaries in question to determine.
HMRC considers that it is good practice to ensure that the appointment of the reporting company is documented. For example, this could take the form of the following:
· A simple file note by a member of the tax team within the group confirming the appointment of a reporting company, where it is clear the individual has the authority to act on behalf more than 50% of the eligible companies.
· A more formal document setting out the company being appointed as the reporting company, a list of the companies authorising the appointment, and a declaration confirming that the companies listed are eligible companies and represent more than 50% of the eligible companies in the group.
Appointments to be made for each period
Appointment of reporting companies must be made for each period. Following changes in Finance Act 2026, reporting company appointments no longer carry forward to future periods. As a result, it is necessary to ensure that the reporting company has the authority from more than 50% of the eligible companies for the period in question.
HMRC considers it acceptable for the group to prepare a standing document that applies on an ongoing a basis (i.e. from one period to the next). This could either:
· Identify individuals within the group who have the authority to appoint a reporting company on behalf of all or certain eligible companies.
· Identify a company in the group who is being appointed as the reporting company for each period, with the authority of all or certain eligible companies.
The reporting company needs to ensure that all the eligible companies in the group are aware that they are the appointed reporting company for the periods concerned.
By submitting an IRR, the individual represents to HMRC that the reporting company has the necessary authority to be appointed as reporting company for the period.
Appointment of reporting company where purported return submitted
In certain circumstances, groups are permitted to appoint a reporting company after the normal deadline where a company has purported to submit an interest restriction return to HMRC, but it is later found that the reporting company identified on the return was not validly appointed. See CFM98477 for more details. Note that while there is no longer a deadline for appointing the reporting company, it is still expected that this will be done before submitting an interest restriction return. The deadline for filing the interest restriction return is 12 months after the and of the period of account.
Consenting and non-consenting companies
In most cases it is expected that companies that authorise a company to be the reporting company for a period will also be a ‘consenting company’. However, in certain circumstances (for example where there are significant minority interests), the company in question may wish to have the additional safeguards of being a ‘non-consenting company’. It is important that the reporting company correctly identifies companies as consenting or non-consenting on the submission of an IRR.
As above with the appointment of reporting companies, it will be necessary to identify which individuals in the group have the authority to decide whether a company is consenting or non-consenting.
The group may wish to document which companies are consenting or non-consenting as part of a standing document.
Single company worldwide group
It is possible for a worldwide group to consist of a single entity: a single company worldwide group, S473(4)(c). If such a company is subject to a CIR disallowance, it could simply include the disallowance in its company tax return. But it may be advantageous for a single company that is likely to have a CIR disallowance to appoint itself as reporting company and submit an IRR. This would enable it to benefit from reactivations of previously restricted tax-interest and to access unused interest allowance in a later period or to make certain elections, processes that require the submission of a full interest restriction return.
Revoking an appointment
It continues to be possible to revoke a reporting company appointment. In a similar way to the appointment of reporting companies, a revocation needs to be authorised by more than 50% of the group. It is expected that this will happen very infrequently, and it is suggested that where this happens the position is documented by the group.
Process for appointments and revocations
Unlike the rules for periods ending before 31 March 2026, appointments and revocations do not need to be made ‘by notice’ to HMRC.
However, details of the appointment will in the future be required to be included in the interest restriction return. For details of the disclosure requirements see CFM98430 for a full return and CFM98440 for an abbreviated return.
Whilst it will not be routinely requested, HMRC may ask to see evidence that a reporting company has been appointed where an interest restriction return has been submitted. Therefore, documentary evidence of reporting company appointments (as outlined above) should be retained.
Further guidance
Overview of reporting company appointments, see CFM98470.
Appointments by groups:
· For periods ending before 31 March 2026, see CFM98472
· For retrospective appointments, see CFM98477
Appointments by HMRC:
· For periods ending before 31 March 2026, see CFM98480
· For periods ending on or after 31 March 2026, see CFM98487