Income Tax (Earnings and Pensions) Act 2003 section 60C

When a company qualifies as small for a tax year: subsidiaries

Section 60C prevents a subsidiary company from qualifying as small for a tax year where it belongs to a group whose parent undertaking does not itself qualify as small.

• A company that is a subsidiary within a group cannot rely on its own size to qualify as small if the parent undertaking of that group does not qualify as small for the relevant financial year
• Where the parent undertaking is not a company (for example, a partnership or other entity), the Companies Act 2006 small company tests in sections 382 and 383 are applied as if references to a company included references to that undertaking
• For a parent undertaking that is not a company, its financial year is relevant to a tax year if it ends at least 9 months before the start of the tax year; for a company, the financial year is relevant if the filing deadline for its accounts falls before the tax year begins
• Terminology used in this section carries the same meaning as in the Companies Act 2006, ensuring consistency between tax and company law definitions