24 Dec Corporate interest restriction: late filing penalties
Following the deadlines is important to get away with fines and penalties. Normally you can get 12 months from the end of the period of account for Interest Restriction Return (IRR) or Corporate interest Restrictions. Penalties for Late filing will come in place when you go beyond this period.
If you have a tangible excuse, then penalties for Late filing will not be charged to you. But you have to file your IRR within a reasonable time after your excuse ends.
How does the reasonable excuse work?
Often you will find confusion about how HMRC interprets reasonable excuses where the filing deadline for an IRR is the same as those for company tax returns. Also, companies within the CIR group have requested deferrals to CT late filing penalties.
You may file IRR using estimated figures. The best-case scenario for you is to file your IRR on time. It will save you from any kind of penalty.
HMRC usually accepts a reasonable excuse to reduce the administrative burden from the companies and groups. They will accept where most of the companies within a CIR group obtained a deferral. CIR groups obtain deferrals to late filing penalties for their company tax returns. If you file the IRR on the same agreed date, there will be a reasonable excuse for the late filing.
What if a reporting company is unable to file the IRR
If your company is unable to file the IRR within the deadline, you should contact your Customer Compliance Manager (CCM).
Sometimes the group doesn’t have a CCM. If your company or group doesn’t have any CCM then you can consider it as a reasonable excuse for late filing of IRR. In this case, you should include this information whenever you file the IRR. HMRC will take note of this before issuing any penalties for late filing. This arrangement greatly reduces the burden of both parties.
HMRC will not issue a penalty without giving you any chance. They will respect all the facts and your circumstances and consider them if they see a reasonable excuse for the late filing of IRR.