Q&As

Does a small or dormant UK company within a large foreign group have to publish a tax strategy under Schedule 19 to the Finance Act 2016?

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Published on LexisPSL on 20/11/2017

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • Does a small or dormant UK company within a large foreign group have to publish a tax strategy under Schedule 19 to the Finance Act 2016?
  • Qualifying company
  • Group definitions
  • Application of the first UK qualifying company test
  • Application of the UK qualifying company test for foreign groups
  • Summary conclusion

This Q&A assumes that the single company is not part of an MNE group (as defined under paragraph 7, Schedule 19 to the Finance Act 2016 (FA 2016)). The rules for which entities form such a group and the qualification tests are different and are based on the rules on country-by-country reporting (for which, see Practice Note: UK country-by-country reporting).

A single UK company is obliged to publish a tax strategy under FA 2016, Sch 19 Pt 2, para 22, if it is a qualifying company.

Qualifying company

A UK company is a qualifying company in any financial year under FA 2016, Sch 19 Pt 1, para 5 if, at the end of the previous financial year:

  1. it satisfied the UK company qualification test and was not a member of a UK group or sub-group, or

  2. it was a member of a foreign group which met the qualification test for a group and it was not a member of a UK sub-group of that foreign group

Group definitions

In both cases it is necessary to consider whether the UK company is a member of a UK group, UK sub-group and/or foreign group. These terms are defined in FA 2016, Sch 19 Pt 1, paras 6–8, 11 and each of them relies on the definition of ‘relevant bodies’, defined in FA 2016, Sch

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