Targeting undisclosed associated companies

HM Revenue & Customs (HMRC) is using data and intelligence to target companies it believes may have incorrectly claimed Corporation Tax Marginal Relief due to undisclosed associated companies.

If you’re one of the businesses that has received a letter from HMRC urging you to check you’ve paid the right amount of Corporation Tax, it’s important you don’t ignore it.

Now is a good time to review your position – and it’s even more important you do this if you own or control more than one company or if any are owned by family members that may be relevant under the control rules.

You should also check if any associated companies have been correctly reported on Corporation Tax returns since 1 April 2023 and if Marginal Relief has been calculated using the correct thresholds.

Given HMRC's apparent focus on this area, business owners should make sure they understand the associated company rules and seek professional advice from our team here at Monahans to avoid penalties later on.