CFM99000 - Interest restriction: administration: penalties: penalties for failure to deliver an interest restriction return

Interest restriction: Administration: Penalties: Penalties for failure to deliver an interest restriction return

TIOPA10/SCH7A/PARA29

A reporting company becomes liable to a penalty under TIOPA10/SCH7A/PARA29 if it fails to deliver a return by the filing date as required by PARA7, or a revised return as required by PARA8(4).

That filing date for a PARA7 return is usually 12 months after the end of the worldwide group’s period of account or, if later, 3 months after the appointment of the reporting company. See CFM98520 for full details and possible exceptions to the normal filing dates.

The filing date for a revised return is set out at PARA8(5). See also CFM98530.

A late filing penalty for a revised return only applies for periods of accounts beginning on or after 1 April 2023. For earlier periods no late filing penalty is chargeable for failure to file a revised return

The penalty is £500 if the return is delivered within 3 months after the filing date, or £1,000 thereafter.

The penalty is levied by an assessment by an officer of Revenue and Customs, notified to the company, within 12 months of the filing date. It is payable within 30 days of that assessment.

No penalty is chargeable where the reporting company has a ‘reasonable excuse’ for the failure, and the return is delivered without unreasonable delay when the excuse ceases (PARA29A). This is in line with the approach taken for late filing under Corporation Tax Self-Assessment. For examples of what HMRC will consider as being a ‘reasonable excuse’, please see CTM94150.

The company has 30 days within which it may give notice of appeal against the penalty.