UK associated companies and corporation tax from 2023 (scenario query)

Jul 21, 2022
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United Kingdom
As I understand it from 2023 corporation tax will be 19% up to £50000 and essentially 25% above this (with tapering discount if more than one associated company between 50000-250000.

Can I clarify in the scenario below would both companies pay 19% tax. In this scenario I would argue the companies are not associated as they different directors.

Company A:
Person 1 is director
Person 2 is secretary (but also earns money that goes into the company from contracting)
Profit £50,000

Company B:
Person 2 is director (earns money from contracting)
Profit £50,000


VIP Member
Sep 1, 2011
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For these purposes, a company is an associated company of another at any time when:

  • one of the two has control of the other; or
  • both are under the control of the same person.
It is the meaning of control which is important.

In particular, a person is treated as having control of a company if the person possesses or is entitled to acquire:

  • the greater part of the share capital or issued share capital of the company;
  • the greater part of the voting power in the company;
  • so much of the issued share capital of the company as would, on the assumption that the whole of the income of the company were distributed among participators, entitled that person to receive the greater amount so distributed; or
  • such rights as would entitle that person, in the event of the winding up of the company or in any other circumstances, to receive the greater part of the assets of the company which would then be available for distribution among the participators.
If two or more persons together satisfy any of the above tests, then they are treated as having control of the company.

It seems in your example that Person 1 has control of Company A, Person 2 has control of Company B. It seems from the information given that these two companies are NOT associated.

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