Mainstream corporation tax rate reduced to 20%
With effect from 1 April 2015 there is one main rate of 20% applying to the majority of UK companies irrespective of their level of profit. At the same time the rules for determining which companies have to pay corporation tax by quarterly instalments have changed.
Broadly now, if for example one company is the 51% subsidiary of another or they are both 51% subsidiaries of a third company they would be associated for corporation tax purposes assuming that none of them is dormant.
This means that the £1,500,000 taxable profit upper limit is split between the number of associated companies and if any of the companies has profits in excess of this sum, potentially they would fall with the quarterly instalment regime. A standalone company would also fall into this regime if its taxable profits exceed £1,500,000.
In the past the associated company test was much broader and more companies were caught so this is a welcome simplification.