CT 600 and Associated companies

KURTIS

For the purpose of reporting and on CT600 # 326/7/8 Is there an association if 2 small companies have common director/shareholding operating in 2 different sectors/premises and independantly without any financial connection or any shared facilities.

DullGreyGuy

Is the shareholder a natural person or an incorporated person? What percent shareholding do they have of both entities?

The HMRC manual on the matter is at https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm03940 

KURTIS

just 1 shareholder and 1 director and a natural person. I have actually read all that is available on the HMRC website but as always I think it's been written using chatGPT.

uknick

"A company is an associated company of another company if one has control of the other, or both are under the control of the same person or persons. ‘Control’ for this purpose has the same meaning as for close companies"

From what you've written in your OP, they would appear to be associated as one person has control over both companies.

KURTIS

even if there is no interdependence

uknick

They're owned/run by the same person.  How can they not be interdependent?

Am I missing something here? 

KURTIS

uknick said:

They're owned/run by the same person.  How can they not be interdependent?

Am I missing something here? 

Because they are Financially, Economically and Organisationally independant.

uknick

I'll ask again, if they have the same director how can they be organisationally independent?  Are you saying the director has no input at all in running the companies?

KURTIS

Read Secion 18E and then the SCI especially the highlighted bit. As there in no sharing staff, premises or euipment.

uknick

KURTIS said:

Read Secion 18E and then the SCI especially the highlighted bit. As there in no sharing staff, premises or euipment.

Please clarify, does one person own both companies and is a director of both companies?  I read those rules under your highlighted line as being if any, not all, of the three conditions are met.

Should the last bullet point read "Organisationally Interdependent"?

Savvy_Sue

Do you want to be able to rely on getting the right answer? ie do you want to be able to sue the pants off whoever advised you if it turns out that HMRC or whoever disagree, take you to court and win? 

Because if you do, then you need 'proper' advice, ie the kind you pay for, from a professional with expertise in these areas. 

Now, I'm not saying that neither uknick nor DullGreyGuy have that expertise (I suspect they do, and I do not), BUT they are not in a professional relationship with you, and no money has changed hands. Since you seem convinced that there is no association in the situation you describe, and I suspect getting it wrong would be an expensive mistake, advice from some random poster on the MSE Forum is not something to be relied on. However, if they agree with any 'proper' advice you've already been given, I'd give up and go with the 'proper' advice.