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Where a business has a filing deadline which it is unable to meet due to the impact of COVID-19, we recommend it proactively contacts HMRC to discuss their circumstances, as it may be possible to agree a deferral of the issue of late filing penalties. In relation to a corporate tax return, HMRC will defer late filing penalties when it considers the company concerned has a 'reasonable excuse' for filing it late. Many companies are also required to contribute to a corporate interest restriction (CIR) return, a separate obligation which is usually prepared in parallel with the corporate tax return has the same filing deadline, but which is filed on a group basis. Companies that are struggling to meet the 31 December deadline for filing their corporate tax return will therefore likely also be faced with delays in contributing to that CIR return and potentially face separate penalties for that late filing (with an initial £500 penalty due).

A CIR return may be filed using estimated figures, so reporting companies (the group member appointed to submit the group's CIR return) should still file their CIR return on time where possible. However, HMRC has confirmed that it will accept there is a "reasonable excuse" for late filing of a CIR return where it has already accepted that the majority of companies within a CIR group have a reasonable excuse for filing their CT returns late due to COVID issues, provided the CIR return is filed by the same date agreed for those CT returns.

If a reporting company is unable to file the IRR by the deadline, they should contact their Customer Compliance Manager (CCM) if they have one. If the group does not have a CCM, and they consider that they have a reasonable excuse for filing the CIR return late, they should include this information when they file it. HMRC can then take account of this before any late filing penalty is issued, reducing the administrative burden for both parties. HMRC will have regard to all relevant facts and circumstances when considering if there is a reasonable excuse for late filing of the CIR return.

HMRC has also confirmed that late filed returns may be amended in the usual way.

For further detail or assistance with CIR, please contact your usual PwC advisor, Graham Robinson or John Webb.