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Use the Associated Companies template to record the names of the company's associated companies. The number of associated companies matters because it reduces the profit thresholds used to work out the corporation tax rate and marginal relief.

Table of contents 

When should I use this template?

Use it whenever the company has one or more associated companies. Since 1 April 2023, the corporation tax rate depends on the level of a company's profits, and the thresholds that set that rate are divided by the number of associated companies (including the company itself).

Why do associated companies matter?

For financial years from 1 April 2023, corporation tax is charged at:

  • the small profits rate of 19% where augmented profits are at or below the lower limit of £50,000;
  • the main rate of 25% where augmented profits are above the upper limit of £250,000; and
  • the main rate reduced by marginal relief (using the standard fraction of 3/200) for profits between the two limits.

The £50,000 and £250,000 limits are divided by the number of associated companies. So a company with one associated company (two companies in total) has limits of £25,000 and £125,000. The more associated companies there are, the sooner the higher rate applies.

Step 1: Enter the number of associated companies in Return information

The number of associated companies is entered in the Associated companies section of the Return information template, not here. This template becomes active once that number is 2 or more (the company plus at least one associate).

Step 2: List the associated company names

When the number entered in Return information is 2 or more, add a row for each associated company and enter its name. Silverfin reconciles the number of names entered here against the number specified in Return information and shows a warning if they do not match, so the two are always consistent.

If the number in Return information is 1 or fewer, the template shows an information message asking you to enter the number of associates in Return information first.

What flows through to the rest of Corporation Tax?

The number of associated companies feeds the tax calculation, where it divides the marginal relief limits and therefore affects the rate of corporation tax and the amount of any marginal relief. The names listed here support that figure in the return.

Where does the data come from?

  • The number of associated companies is taken from the Associated companies section of Return information — this template becomes active when that number is 2 or more, and reconciles the number of names you enter here against it.
  • The names you enter here support the count, which in turn feeds the Tax calculation (dividing the marginal relief limits).

Frequently asked questions

Why can I not enter any names?

The table only appears when the number of associated companies in Return information is 2 or more. Enter the number there first.

Why am I seeing an unreconciled warning?

The number of names entered here does not match the number specified in Return information. Add or remove names so the two agree.

Do associated companies always reduce the thresholds?

Yes — for financial years from 1 April 2023 the £50,000 and £250,000 limits are divided by the total number of associated companies, which can move the company into marginal relief or the main rate.