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Getting reacquainted with the associated companies rules

Shared from Tax Insider: Getting reacquainted with the associated companies rules
By Kevin Read, July 2021

Kevin Read explains why the ‘associated companies’ rules will soon be important again. 

The introduction of the 19% flat rate of corporation tax (CT) in 2017 put the topic of ‘associated companies’ on the backburner.  

This will change from 1 April 2023, as the 19% CT rate will only apply where profits are up to £50,000. The rate will become 25% if profits are at least £250,000, with marginal relief applying below these limits. However, these thresholds are divided by the number of associated companies, so some companies may end up paying at the top rate when profits are below £250,000. 

Other limits that will need to be divided by the number of associated companies from April 2023 are: 

  • CT payments – the £1.5 million and £20 million profit limits for testing whether and when a company has to make quarterly

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