Corporate Interest Restriction (CIR) legislation became effective from the 1st of April 2017. It applies to corporate entities. It’s aim is to restrict a group’s deductions for interest expense and other financing costs for Corporation Tax purposes to an amount that is commensurate with taxed UK activities. It takes into account how much the group borrows from third parties such as banks and other finance options.
Further information can be found on how to submit a Corporate Interest Restriction return and the restriction on Corporation Tax relief for interest deductions on GOV.UK.
HMRC has developed an Application Programming Interface (API) for submitting Interest Restriction Returns (IRR) and for reporting company appointments and revocations. This will be available for use from July 2021. The APIs can be found on the HMRC Software Developers Hub.
Software developers have now been provided with a roadmap to begin updating their products.
The existing service will run in parallel with the API until April 2022. At this time HMRC will be looking to mandate the use of API for submission of IRRs and reporting company appointments and revocations. The existing functionality will therefore be switched off at this time. Customers will no longer be able to submit through alternative routes, such as email or with company tax returns.
If this will cause you any issues please contact SDSTeam@hmrc.gov.uk.
Help and support with the Corporate Interest Restriction
If you need help with the Corporate Interest Restriction or any other aspect of your Financial Accounts or Corporation Tax contact me now.