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Is Augmented profit still used in the determination of whether a company is large or small. Do we add the dividends from unrelated/non subsidiary companies for this determination? I learnt it in prior years so just for clarification/ Thanks
Hi Nadiranks, Yes it is still used in the way you describe. All entities for which you have an direct or indirect 51% interest ownership will have to be added together (Company 1 + Company 2 etc..) and divide it by the 1.5 Million large company threshold in order to determine the amount of Profit each of these Companies has to have at least in order to being perceived as a “large company” by HMRC for tax purposes. If the company is being perceived as being large quarterly payments on account will have to be made instead of annual payments. Important to mention is also that for augmented profit calculation it doesn’t matter if a 51% company is resident or not.
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