Along with the new marginal relief rules which will come into place with the 25% tax rate from 1 April 2023, ensuring that all companies with less than £50,000 profits continue to pay at 19% and those with between £50,000 and £250,000 pay at the marginal rate calculated between 19% and 25%.
An important “devil in the detail” arising from the budget is that HMRC have repealed the 51% related companies rules and replaced them with new associated company rules which are very similar to the historic associated company rules which existed pre 2015.
The latest rules are
This will be the case for its application for determining the new marginal relief rules, whether a company is large or very large for quarterly instalment payment purposes and for determining whether a company may elect to use the small claims treatment for the Patent Box, and so on.
Going back to the associated rather than related company rules is likely to bring more companies into the definition for a number of groups and could therefore have cash tax implications so it's important to review how this will impact your group.
