CFM99005 - Interest restriction: administration: penalties: penalties for submission of an interest restriction return where reporting company not appointed
This page of guidance applies for periods of account ending on or after 31 March 2026.
TIOPA10/SCH7A/PARA11A
For periods ending on or after 31 March 2026, a company is liable to a penalty under PARA11A if it has purported to submit an interest restriction return for a period of account, and it had not been appointed as a reporting company for the period at the time that it submitted the return.
The penalty is £1000, and HMRC must assess the penalty and notify the company within the period of 12 months beginning with the day on which a company is subsequently appointed as the reporting company for the period of account. The company may appeal the penalty by notice to HMRC within 30 days. Any such penalty is payable within 30 days of the day on which the company was notified of the penalty, or if the penalty is appealed, 30 days of the day on which the appeal is finally determined.
However, liability to a penalty under PARA11A does not arise if;
· the company that submitted the return is appointed as the reporting company for the period of account by the group under PARA1A at any time up to the end of 18 months after the period of account;
· without being prompted by HMRC, the company notified an officer of HMRC of the fact that it was not appointed as reporting company when the return was submitted; or
· there is a reasonable excuse for having failed to appoint a reporting company before the return was submitted (and the reporting company is appointed without unreasonable delay after the excuse ceased).
Case teams should not routinely check that a reporting company has been appointed for interest restriction returns submitted. Case teams should refer to BAI before questioning the validity of a reporting company appointment or seeking evidence in relation to this.