The Corporate Interest Restriction

Overview

• The objective of the CIR legislation: limiting the deductibility of finance costs for UK corporation tax purposes
• How CIR fits amongst other anti-avoidance legislation relating to interest deductibility

CIR Course: Overview of the Steps You Will Follow

• Step 1 – Identifying the worldwide group
• Step 2 – Working out the net financing costs in the UK:
  • £2m de minimis rule
• Step 3 – Working out the aggregate ‘tax EBITDA’ of UK group companies
• Step 4 - Working out the interest allowance and interest capacity for the group, taking into consideration the:
  • Fixed ratio debt cap
  • Group ratio debt cap
  • Excess debt cap
  • Brought forward interest allowance
• Step 5 – Working out the disallowance in the year by comparing the UK position with the group’s interest capacity
• Step 6 – Allocating the disallowance of the UK group to individual UK companies
• Reporting company and other CIR admin, such as abbreviated and full returns
• Reactivating a disallowance at a later date
• CIR Elections, e.g.public infrastructure

All of the above steps and topics include examples and case studies. These will be attempted in break-out groups to ensure interest restriction training is interactive.

A case study will include examples of the following:

• Determining the worldwide group
• Net UK financing costs – how to calculate them, and what is included and excluded
• Amounts added and deducted to calculate the aggregate Tax EBITDA for each UK group company
• Considering the group’s overall debt position, calculating aggregate net group interest expense and qualifying net group interest expense
• How to work out the fixed ratio and group ratio debt cap, and when to elect to apply the group ratio
• Calculating the disallowance and reactivating a previously disallowed amount concludes this session on CIR accounting

Redcliffe’s corporate interest restriction training is led by a seasoned Chartered Accountant and Chartered Tax Adviser. With over 25 years of experience in practice and industry, she has held a range of senior tax roles focusing on corporate and international tax.

Transitioning into professional education in 2008, she has worked for tax tuition providers and led the in-house technical training team of a large accountancy firm for several years. As a result, she has extensive experience designing and delivering tax programs for firms and clients that are both practical and commercially relevant.

Across a number of years, our specialist has built a solid relationship with CIOT and contributed to their working party on the future of the CTA qualification, ensuring it remains relevant.

Our CIR course expert provides training for professional qualifications and Continuing Professional Development (CPD), such as corporate tax updates. She helps tax professionals stay current with the ever-evolving and increasingly complex world of corporate and international taxation.

Sessions at Redcliffe Training provide a clear and practical guide to CIR accounting, enabling participants to understand when the rules apply, how disallowances are calculated, and related compliance requirements, including:

• To identify when CIR is relevant
• To calculate the financing costs disallowed in a tax computation in each year
• To identify opportunities to reactivate previously disallowed finance costs
• To understand the compliance obligations of CIR and ensure that a group files the appropriate CIR return

Unlike many traditional lecture-style tax sessions, Redcliffe’s CIR course is highly interactive and learner-centric by design. Participants are actively involved throughout sessions, applying the rules to practical scenarios and case studies that mirror real-world corporate tax issues. Attendees are encouraged to engage fully, share experiences, and raise questions to ensure the learning process is collaborative and relevant to professional circumstances.

Our session leader facilitates open discussion and provides expert guidance. Participants not only understand the technical framework but also gain confidence in applying CIR accounting principles in practice, upon course completion.

This course is designed for tax professionals who are preparing, or will be imminently preparing, tax computations and returns for companies affected by the Corporate Interest Restriction rules, typically where net interest expense exceeds £2 million.

This CIR course is appropriate for individuals responsible for preparing abbreviated or full CIR returns, or those who need to understand why finance costs incurred may be disallowed for tax purposes.

The corporate interest restriction legislation limits the finance costs that can be deducted by groups for tax purposes. Any group with net financing costs over £2m may be impacted.

Interest restriction training helps to break down complex CIR legislation (over 150 pages) into a series of mechanical steps, ensuring a more digestible overview.

Sessions are highly practical, considering the compliance obligations of a reporting company, ensuring it files the most appropriate return on time to avoid interest and penalties.