New regulations ensure that companies will not inadvertently be treated as ‘associated’ when the main rate of corporation tax increases, and the small profits rate returns, on 1 April 2023.
The Corporation Tax Act 2010 (Factors Determining Substantial Commercial Interdependence) Regulations, SI 2022/1203, set out whether a relationship between two companies amounts to ‘substantial commercial interdependence’. This aims to ensure that companies are not treated as associated by mere accident of circumstance and consequently not entitled to the small profits rate of corporation tax or marginal relief.
Rather than setting out the relevant factors in the regulations themselves, they instead apply the substantial commercial interdependence factors set out in the National Insurance Contributions Act 2014 Sch 1 para 3(3). The regulations come into force on 1 April 2023.
New regulations ensure that companies will not inadvertently be treated as ‘associated’ when the main rate of corporation tax increases, and the small profits rate returns, on 1 April 2023.
The Corporation Tax Act 2010 (Factors Determining Substantial Commercial Interdependence) Regulations, SI 2022/1203, set out whether a relationship between two companies amounts to ‘substantial commercial interdependence’. This aims to ensure that companies are not treated as associated by mere accident of circumstance and consequently not entitled to the small profits rate of corporation tax or marginal relief.
Rather than setting out the relevant factors in the regulations themselves, they instead apply the substantial commercial interdependence factors set out in the National Insurance Contributions Act 2014 Sch 1 para 3(3). The regulations come into force on 1 April 2023.
