The April 2026 tax changes affect remuneration planning across multi entity structures. In group environments, incremental changes can have material impact when scaled across multiple companies, making coordination and early visibility essential.
Why this matters for group finance leaders
In a group environment, decisions around remuneration, capital expenditure, and succession planning are rarely isolated to a single company. Changes to thresholds, reliefs, and allowances need to be considered consistently across the group structure.
What may appear immaterial at entity level can become significant when scaled across the wider structure. Associated company rules, marginal relief division, and coordinated timing decisions all require structure, visibility and early alignment.
What you need to know or consider
Associated company rules: Corporation Tax thresholds (£50k and £250k) are divided between connected companies. Where there are associated entities, the marginal relief band narrows significantly, making profit and remuneration planning more complex.
Marginal relief in group structures: The impact of marginal relief compounds across groups. Understanding which entities fall within which bands, and how remuneration decisions affect effective tax rates at group level, is critical for efficient planning.
Employment Allowance allocation: Only one company in a connected group can claim the Employment Allowance of £10,500. Allocating this efficiently requires coordination and may need annual review as payroll costs change.
Director bonus timing: The timing of bonus declarations and payments can affect Corporation Tax deductions across entities. Coordinating this across the group ensures deductions are claimed in the most tax efficient way.
Remuneration consistency: Managing remuneration consistency across directors and senior management in multiple companies requires balancing commercial justification with tax efficiency. Group wide policies need to account for entity specific circumstances.
Employer pension contributions: Coordinating pension contributions across the group for key individuals can optimize both corporation tax relief and personal tax efficiency, particularly where individuals work across multiple group entities.
Directors’ loan accounts: Managing loan accounts at group level requires visibility of all inter-company positions. The increased s455 charge of 35.75% makes early identification and clearance planning even more important.
These changes are best considered at group level rather than in isolation. We are already incorporating them into group planning, but early visibility of upcoming investment, restructuring, or succession discussions is key.
