Business Tax- How to enter Associated Companies for CT600 and marginal relief box 326/329?

business-tax-how-to-enter-associated-companies

Business Tax- How to enter Associated Companies for CT600 and marginal relief box 326/329?

10th July 2023

IRIS Business Tax

IRIS Business Tax- Associated Companies: box 326 and 329 etc Page 4 CT600. 3001 9389 Associated companies section can only be completed if return period end date in Box 35 is on/after 01/04/2023

Post 2023 Associated Companies: Data Entry – Calculation – Tax calculation. Enter ‘Associated companies’ numbers to affect the marginal relief calc. These boxes only appears on Post April 2023 dates onwards (see image below). If under 50K: It will still use the 19% tax. If under 250K: It will give marginal relief to the tax calc, IF there are more ‘Associated companies’ then it lessens the tax threshold. It will show on the tax comp as a line named ‘Less marginal relief’.

If there is no profit: then box 326 etc will be empty and also check dates as its only after post April 2023 (see below on box 326)

Split periods, gives you two boxes to enter: check the dates as it will apply based on the period dates even if the one of the periods HAS NO entry made (i.e. only 1 period has an associated company entry). Also note if you have different associated company entries between the TWO split periods, then the highest number of companies entered will be used in the calc.  (The HMRCs own calculator only has one company field which can be entered for the calculation)

How many associated companies should i enter in? From the HMRC site: ‘You must enter the number of companies associated with your company for any part of the accounting period if either the: company’s profits are chargeable at the small profits rate. company is entitled to Marginal Relief‘. If this is unclear if it’s the TOTAL of all companies or excluding the one you are on then you will need to contact HMRC support on what they recommend.

Box 329 (For marginal relief) will be automatically ticked dependent on the accounting period, the level of profits and the number of associated companies. For periods straddling or starting on or after 1 April 2023. The profit would need to be within £50K to £250K range (these thresholds will be apportioned based on the length of the AP and by the number of associated companies). If profit is low enough it will also trigger 329 (see box 345).

3001 9389 Associated companies section can only be completed if return period end date in Box 35 is on/after 01/04/2023. Check if its a long period, is there is a 51% entry made possibly in the 1st period? if yes then this is a known error and our Development team is looking for a fix. If a urgent submission then use this workaround, remove the 51% grp companies entry and add it as a note in Edit | Notes. So you can now submit with no errors.