Corporate interest restriction – an update to HMRC’s approach to reporting company appointments

Background 

Following the publication of guidance in September 2024, we have had discussions with advisers and representative bodies. On the back of this, we have been reconsidering our approach.  

We continue to view RC appointment as part of the self-assessment system and it is the group’s responsibility to comply with the administrative requirements. When preparing to submit an interest restriction return (IRR) we expect groups to satisfy themselves that they have validly appointed a RC (including retaining a record of having done so).  

However, we hear the concerns that have been raised with us.  Having considered matters, we will be changing our approach for certain periods. In particular, we are looking to draw a line in the sand and alleviate the issue, as far as we can, for periods ending on or before 31 March 2024.  

(1) Periods where HMRC was still in time to appoint a RC on 31 March 2025 

For periods where HMRC was still in time to appoint a RC on 31 March 2025, we will not pursue the specific point that failure to validly appoint a RC would invalidate the filed IRR. This applies to periods ending on or after 31 March 2021 and on or before 31 March 2024. It also includes some earlier periods where we have an open CTSA enquiry for a company in the group for the period.  

Practical steps: 

• For groups where we are currently asking or have an open dispute about the RC status for those periods, we will be contacting the group in the near future.  
• Where groups have previously accepted that HMRC would not appoint a RC on behalf of the group, they can approach HMRC and we will work with the group on this. We would only expect groups to contact us where there is a tax impact. 
• Groups should not be approaching HMRC “just in case”. HMRC will not appoint a RC for a group unless we have previously contacted the group to highlight an issue with, or absence of, an appointment. 

The relaxation in our approach is on the specific point of whether there is a valid RC appointment . We may still use our compliance powers to ensure the numbers in the interest restriction return (IRR) are correct. Where we are looking to open an enquiry, we may ask about the RC for the group. Where the RC appointment status is unclear, we are likely to appoint a RC ahead of opening an enquiry.   

(2) Earlier periods - Periods ending before 31 March 2021 

We are still considering our position for cases where we have identified that no RC has been appointed but, as at 31 March 2025, we no longer had the power to appoint a RC.   We are not specifically looking to enquire into issues about RC status for these periods, but it is possible they may arise, albeit the likelihood will reduce over time. As noted, we are considering the position for such cases.  

(3) Later periods - Periods ending after 31 March 2024

The relaxation in approach only applies to periods ended on or before 31 March 2024. For later periods, groups should be making sure that they have a valid RC appointed before they submit an IRR.  

Where a group has established that the status of its RC is uncertain, we advise that the group submit a new valid RC appointment to put the issue beyond doubt. If the group wishes  to appoint a different group company to the company that has previously submitted IRRs, they should revoke the appointment of the previous RC.  HMRC will not view the appointment of a RC for a period ending after 31 March 2024 as any suggestion or admission that there was not a  validly appointed RC for previous periods, and we will not take action in relation to RC appointment validity in periods ending before April 2024 simply as a result of a fresh RC appointment. 

 If you have any cases where you are unsure how this approach will work in practice, please contact your Customer Compliance Manager (if you have one) or [email protected]