½Û×ÓÊÓƵ

Associated companies ― from 1 April 2023

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance

Associated companies ― from 1 April 2023

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance
imgtext

Implications of associated companies

From 1 April 2023, the rate of corporation tax that a company is subject to depends on the level of its augmented profits. The rate of tax is based on a comparison of the company’s augmented profits against the corporation tax thresholds of £50,000 (the lower limit) and £250,000 (the upper limit). In summary:

  1. •

    where augmented profits are £50,000 or less, a rate of 19% applies (known as the ‘small profits rate’)

  2. •

    where augmented profits are between £50,001 and £250,000, a rate of 25% applies but marginal relief is available

  3. •

    where augmented profits are more than £250,000, a rate of 25% applies (known as the ‘main rate’)

FA 2021, Sch 1; CTA 2010, ss 18A, 18D

Broadly, augmented profits means taxable total profits plus certain types of distribution income. Only distributions received from non-group companies are included when establishing augmented profits, so group dividends are ignored. For more information on the meaning of augmented profits, see the Computation of corporation tax guidance note.

The upper

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by

Popular Articles

Gifts out of surplus income

Gifts out of surplus incomeA valuable exemption from inheritance tax (IHT) applies to gifts out of surplus income. This exemption applies only to lifetime gifts and is therefore a key part of lifetime planning. The exemption applies to both outright gifts and gifts into trust. Gifts which meet the

14 Jul 2020 11:48 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more Read more

Holding companies ― VAT status of activities

Holding companies ― VAT status of activitiesThis guidance note examines how to determine the VAT status of a holding company’s activities. In particular, it looks at:•when a holding company is or is not in business•if a holding company is in business, whether its activities are exempt or taxableThe

14 Jul 2020 17:13 | Produced by Tolley Read more Read more

Capital allowances on cars

Capital allowances on carsSummary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions of 50g/km and below 18%CAA 2001, s 104AASecondhand cars with CO2

14 Jul 2020 11:08 | Produced by Tolley Read more Read more