Plan to reform associated company rules

A joint HMRC and HM Treasury consultation document is seeking views on a proposal for reforming the associated company rules as they apply to the small companies' rate of corporation tax.

The aim is to find out whether the option presented would benefit business by providing a more targeted test to establish those firms that form an economic whole and thus whose profits should be considered collectively in establishing the rate of corporation tax that applies to them.

Under the new ‘fragmentation’ test, companies would not become associated by an attribution of rights just by an accident of circumstances. The consultation includes the relevant draft legislation and guidance.

Responses should be sent by 22 January 2010 via email or by post to the Related Companies Simplification Review Team, Room 2/N2, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ.

Issue: 4231 / Categories: News , Companies