Associated Companies Vs Business in Association

Does the change to Associated Companies Rules also now apply to National Insurance Thresholds?

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I have just watched a webinar this week regarding the new Associated Companies rules, of which most of the content I had previously seen and am now familiar with, but there was one part where the presenter went on to highlight that if two companies are associated, then the NI thresholds will also need to be apportioned where there are multiple employments for the same person in place with the associated companies, such as when an individual owns two companies outright and draws a salary from both.

I have always been familiar with the rules around aggregation of earnings, but the definition of when two or more companies are associated were not the same as the new rules are for corporation tax for example.

For NI purposes, when determining if two or more businesses are associated, the term used is ‘Business in Association’, more details of which can be found in NIM10010 - Aggregation of Earnings. And the definition is certainly not the same as the new rules as far as I understand.

But the way the presenter of the webinar addressed this issue was as if the new Associated Companies rules also now applied to aggregation of earnings and NI threshold, and he made no mention of the definition of ‘Business in Association’ being different.

Can anyone confirm whether the new rules now replace the previous definition of ‘Business in Association’ for NI thresholds and aggregation of earnings, or have I just been misled/confused here?

I would have thought not, because the aggregation of earnings rules could apply to all types of businesses, not just corporate entities, could they not?

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By FactChecker
16th May 2024 20:41

I can't offer you conclusive proof ... but I agree with every bit you've said (including the inferred-only possibility that the 'webinar presenter' was out of their depth).

It is impossible for any definition to be 'transferred across' from one set of legislation (such as CT) to a different set (such as NI) without very direct linkage ... it doesn't just happen so as to suit a lazy presenter.

As you say the long established rules for 'NI aggregation of earnings' are, in plain English, about the treatment of one individual who has concurrent employments with two (or more) employers ... at which point the concept of 'Business in Association' may come into play.

And, yes, the aggregation of earnings rules can apply to all types of businesses (not just corporate entities) ... schools within a MAT being a regular example.

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