Associated Companies

Price Mann • April 26, 2023

Associated Companies

Corporation tax (CT) rates will be changing from April 2023. The rates will be as follows:

Small profits CT Rate: is being reintroduced from April 2023, where the companies that qualify will be able to pay 19% on Taxable Total Profits plus exempt dividends received that do not exceed £50,000
Main CT rate will be 25% where a standalone company’s augmented profits exceed £250,000
Main CT rate but with deduction for marginal relief: where profits are between £50,000 - £250,000 and the company is not a close investment-holding company in that period

In case, there are two or more companies associated with each other, these limits will be divided by the number of companies involved. If there are only 2 companies involved this means that thresholds will be divided by 2 with a potentially significant increase to the tax payable for either or both of them.

Basically, a company is an associated company of another when there is common control or one of them controls another.

A person is treated to having control of a company if they can exercise or are entitled to acquire direct or indirect control over the company’s affairs.

In particular, if they can acquire a greater part of the share capital, take a greater part of the voting power and/or receive a greater part of the distributions or the assets of the company among the participators.

How to understand if companies are associated?

To determine if companies’ relationship is that of substantial commercial interdependence or not, the following factors should be taken into account:

Financial interdependence: It can be direct and indirect financial support between the 2 companies.
Economic interdependence: Companies can be economically interdependent if they have the same economic goals, the activities of one benefit the other, or if they have common clients.
Organisational interdependence: when two companies have common employees, common equipment, or common premises such as property or office.

In case two companies do not have common dominators to share there would not be substantial commercial interdependence between companies and each company should pay its corporation tax liability separately and cannot regard the other.

HMRC stated that each case is different and will depend on its own specific circumstances and hence it is important to get professional advice when determining if the companies are associated or not.

Talk to us if you have any queries regarding the associated companies.

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P60 deadline: Actions to take before 31 May

By Price Mann • May 6, 2026

Many business owners treat P60s as a simple box-ticking exercise. While meeting the deadline is important, stopping there means missing a valuable opportunity to identify payroll errors early, before they become more costly to resolve later in the year. With the 31 May deadline approaching, here is what you need to know and why it matters. P60 deadline: 31 May 2026 Every employee on your payroll as at 5 April 2026 must receive their P60 by 31 May 2026. There are no extensions. Missing the deadline may result in HMRC penalties, as well as issues for employees who require their P60 for mortgage applications, tax returns, or benefit claims. If you manage payroll in-house, ensure this is scheduled. If you outsource payroll, confirm with your provider that it is being handled. Key change for 2026/27: Plan 5 student loans From the 2026/27 tax year, Plan 5 student loans will enter repayment. The threshold is £25,000, which is lower than Plan 2, meaning more employees may be affected than expected. Now is the time to check which plan each employee is on. Errors in this area can lead to payroll corrections, HMRC queries, and additional administrative work. Accountant’s tip: Use the P60 process to review student loan plans and ensure the correct deductions are in place for the new tax year. Use P60s as a payroll review While reviewing P60s, carry out a sense check on Benefits in Kind ahead of the July P11D deadline. Common issues include company cars, private medical insurance, and interest-free loans being incorrectly classified or overlooked. Identifying any issues now allows time to correct them properly, rather than dealing with pressure and potential penalties closer to the deadline. What to review before 31 May Confirm all eligible employees will receive their P60 on time Review student loan plans, particularly where employees may fall under Plan 5 Cross-check Benefits in Kind against payroll records Ensure 2026/27 tax codes are correct from the start of the tax year Need support? Please contact us