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This guidance applies to returns which are relevant returns for a corporate interest restriction (CIR) period beginning on or after 1 April 2023.

For relevant returns for periods before this date, HMRC staff should seek advice from the specialist technical team, see CH910000.

Example 1A, B and C are companies in a CIR group.

Their returned results are:

Company A鈥檚 return is found to contain a careless inaccuracy which is put right to produce a true taxable profit of 拢85,000.

Company	Profits	CIR allocation
Company A	拢50,000	CIR reactivation 拢30,000
Company B	拢75,000	CIR reactivation 拢20,000
Company C	拢60,000	CIR reactivation 拢nil
-	-	Original reactivation cap 拢50,000

As a result of this change, the group is required to submit a revised interest restriction return (IRR), increasing the total reactivation cap by 拢5,000 from 拢50,000 to 拢55,000.

In the revised IRR, Company A increases its CIR reactivation by 拢25,000, from 拢30,000 to 拢55,000, and Company B reduces its reactivation by 拢20,000, from 拢20,000 to 拢nil.

For the purposes of calculating the potential lost revenue (PLR) in Company A, only the proportion of the increase in the reactivated amount that was originally allocated to Company A may be taken into account.

Here, the original allocation was three-fifths to Company A, and two-fifths to Company B. Therefore, in calculating the PLR for Company A, only three fifths of the total increase in reactivation cap of 拢5,000 can be taken into account.

PLR calculation:

Enquiry adjustment听听听听听听听听听听听听听听听听听听听听听 拢35,000 (拢85,000 less 拢50,000)

CIR increased reactivation听听听听听听听听听听 (拢3,000) (three-fifths of 拢5,000)

Additional profits for PLR听听听听听听听听听听聽聽 拢32,000