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student07
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Sir I am sitting for P6 exam can you please explain related and associated co and how are the changes in FA 15 going to affect this.
Tax Tutor
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Associated companies were relevant up to FA 2014 and were used in determining the profit limits mainly for group companies which then established whether a company was small. marginal or large and thus the tax rate applicable to it.
From FA 2015 there is only one tax rate and the term associated companies no longer applies,
We now refer to related 51% group companies which is used to determine the profit threshold based on £1.5M (the old upper profit limit) which remains relevant in determining whether a company will be required to make quarterly instalment payments to settle its CT liability
Read the Corporation Tax section of the ACCA F6 FA 2015 technical update for further details which is relevant to P6 as referenced in the P6 FA 2015 technical update
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