SCHEDULES
F1SCHEDULE 7AInterest restriction returns
PART 2Contents of interest restriction return
Penalty for incorrect or uncorrected return
30
1
A company is liable to a penalty if—
a
the company (or a person acting on its behalf) submits an interest restriction return to an officer of Revenue and Customs for a period of account of a worldwide group,
b
there is an inaccuracy in the return which meets condition A or B, and
c
the inaccuracy is due to a failure by the company (or a person acting on its behalf) to take reasonable care (a “careless inaccuracy”) or the company makes the inaccuracy deliberately (a “deliberate inaccuracy”).
2
An inaccuracy meets condition A if it consists of understating the total disallowed amount in the period of account of the group (including a case where no amount is specified in the return).
3
An inaccuracy meets condition B if it consists of overstating the interest reactivation cap in the period of account of the group.
4
A penalty payable under this paragraph is equal to the appropriate part of the notional tax.
5
For the purposes of this Part of this Schedule—
“the appropriate part” means—
- a
in the case of a careless inaccuracy, 30%,
- b
in the case of a deliberate inaccuracy that is not concealed, 70%, and
- c
in the case of a deliberate inaccuracy that is concealed, 100%, and
- a
“the notional tax” means the result produced by applying the average rate of the main corporation tax rate applicable in each of the days of the period of account to the total of the amount of the understatement referred to in condition A and the amount of the overstatement referred to in condition B.
6
A company is not liable to a penalty under this paragraph in respect of anything done or omitted to be done by the company's agent if the company took reasonable care to avoid the inaccuracy.
Sch. 7A inserted (with effect in accordance with Sch. 5 para. 25(1)(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 2 (with Sch. 5 para. 28)