Article:

Corporate interest restriction - the basic rule

23 August 2017

The new corporate interest restriction has come into following the recommendations of the OECD’s ‘Base Erosion and Profit Shifting’ project on interest expense (Action 4).

The potential impact of the interest limitation rule is expected to be significant for some groups. The Government originally anticipated it will raise approximately £1bn of additional tax a year. This is a significant amount in the context of total corporation tax receipts of £45.5bn in 2015/16 and the relatively narrow tax base to which the rule will apply.

As the new rule applies from 1 April 2017 so it is important that groups consider the impact without delay.