As part of the update provided by Budget 2009 on the Government’s tax simplification reviews, the Government committed to consult on further simplification of the associated company rules.

I am today publishing a consultation document to fulfil that commitment. The consultation seeks stakeholders’ views on a proposal to reform the associated company rules as they apply to the small companies’ rate of corporation tax. The proposed reform aims to benefit businesses by providing a more targeted test to establish those companies whose profits should be considered collectively in establishing the rate of corporation tax that applies to them. Further details can be found in the consultation document, copies of which have been deposited in the Libraries of both Houses and are available on HM Treasury’s website.