Associated companies

Companies under common control share the corporation tax thresholds between them.

What it means

Where companies are associated — broadly under common control — the corporation tax rate bands are divided between them.

Why it matters

Setting up a second company can therefore increase the tax on the first, which is the opposite of what owners usually expect.

What it looks like in practice

The rules look at control, including rights held by associates such as family members, so companies owned by spouses can be associated.

What to watch out for

Incorporating a new venture without checking. And dormant companies, which can still count in some circumstances.

Where to get proper advice

GOV.UK for the current rates and thresholds, which move most years. Your accountant before acting — this is exactly the kind of question a fee is for.