HM Revenue & Customs have produced a toolkit for identifying associated companies and proving whether small company rates or marginal small company relief (MSCR) is due.
Much commentary has suggested that the toolkit should be used every time the small company rate/MSCR is claimed with the checklist incorporated into the procedures of all accountancy firms so that the issues brought up are discussed annually with the directors of companies.
HMRC have stated that penalties could be applied where such rates are applied incorrectly and it is therefore important to ensure that the correct procedures are followed.  Having the completed checklist on file would be an advantage, but it must also be clear that someone has appropriately considered the circumstances.
There are proposals to change the rules on associated companies which are currently in consultation.  The proposed new rules look at commercial interdependence rather than the current basis looking strictly at control.
The toolkit can be found at www.hmrc.gov.uk/agents/toolkits/mscr.pdf