Accounting and tax for groups of companies
When your business becomes more than one company, the accounting and tax become more involved. We look after the whole group as one.
Holding companies, trading subsidiaries and property companies can protect assets and keep risk where it belongs. They also bring more to manage: consolidated accounts, intra-group balances, group relief and VAT across the group.
We look after every company in the group, so the accounts agree with each other, losses and reliefs are used where they save the most tax, and the structure keeps working for you as the group changes.
- 1We map the group and how its companies work together
- 2We agree a fee and a timetable for the whole group
- 3We prepare each company's accounts
- 4We prepare the consolidated accounts and tax returns
- 5We use group reliefs where they save the most
- 6We review the structure as the group changes
Who benefits, and how
A group of companies can protect assets, separate risk and make the business easier to grow or sell. It only works if the accounting and tax are run as one, which is where we come in.
Group owners
- Valuable assets, such as property or intellectual property, held away from the risks of the trading business.
- Losses in one company set against profits in another, so the group pays tax on what it really makes.
- Assets moved between companies without an immediate tax charge, where the group rules allow it.
- A structure that is ready for a sale, a new investor or the next generation, without starting again.
Finance directors and management
- One timetable and one point of contact for every company in the group.
- Intra-group balances and recharges that agree on both sides, so the consolidation is not a scramble at the year end.
- One VAT return for the group if a VAT group suits you, instead of one for each company.
- Clear advice on what each company must file, and when.
Buyers and investors
- Consolidated accounts that show the performance of the group as a whole.
- A clean structure, where it is clear which company owns what and owes what.
- A trading subsidiary can often be sold out of the group without a tax charge on the gain, where the conditions are met.
Common group structures and tools
Most groups use a combination of these. The right mix depends on what the business does, what it owns and where the owners want it to go.
Holding company structure
A parent company that owns the shares in one or more trading companies.
- Suits
- Owners who want to protect cash and assets, add new businesses or prepare for a sale.
- What's involved
- Usually a share-for-share exchange to put a new company on top, with HMRC clearance where needed.
- Watch out for
- Companies under common control are usually associated for corporation tax, so the £50,000 and £250,000 limits are divided between them. A holding company that does nothing but hold shares in its subsidiaries is not counted.
Trading subsidiaries
Separate companies for separate activities, brands or risks.
- Suits
- Groups with distinct businesses, a new venture to test, or a risky contract to ring-fence.
- What's involved
- Each subsidiary keeps its own books and prepares and files its own accounts and tax return.
- Watch out for
- Intra-group charges should reflect what each company really does for the others, and be recorded in the books of both.
VAT group registration
Two or more companies registered for VAT as a single taxable person.
- Suits
- Companies under common control, each established or with a fixed establishment in the UK, that trade a lot with each other.
- What's involved
- One representative member files a single VAT return for the group. Supplies between members are generally ignored for VAT.
- Watch out for
- Every member is jointly and severally liable for the whole group's VAT, and a company can only be in one VAT group at a time.
Reorganisations and demergers
Changing the structure as the business and its owners change.
- Suits
- Separating property from trade, splitting a business between shareholders, or tidying up before a sale.
- What's involved
- Careful planning across corporation tax, capital gains, stamp duty and company law, often with advance clearance from HMRC.
- Watch out for
- Moving an asset within the group and then selling the company that holds it within six years can bring back the gain. We plan the order of steps with that in mind.
Group rules for tax and for accounts are different, and the tests are not the same. A company can be in a group for one purpose and not another. We map your structure against each set of rules.
Group relief for losses
Where one UK company in a group makes a loss and another makes a profit, the loss can be surrendered to the profitable company to reduce its corporation tax. Losses carried forward from 1 April 2017 onwards can also be surrendered in many cases.
For group relief, the companies must be in a 75% group: one is a 75% subsidiary of the other, or both are 75% subsidiaries of a third company, counting ordinary share capital and entitlement to profits and assets. The relief is claimed through the companies' tax returns, and we decide with you where the losses save the most.
Moving assets within the group
Assets can usually be transferred between UK companies in the same capital gains group at no gain and no loss, so no tax is due at the time of the transfer. The receiving company takes on the original cost, and the gain is taxed when the asset is eventually sold outside the group.
There are traps. If a company leaves the group within six years of receiving an asset this way, while it still holds the asset, a degrouping charge can arise. When the group sells a trading subsidiary, the substantial shareholding exemption can take the gain out of tax, provided the seller has held at least 10% of the shares for a continuous twelve months in the six years before the sale and the company sold is a trading company or the head of a trading group. We check the conditions before you commit to a deal.
Consolidated accounts and the small group exemption
A parent company must usually prepare consolidated accounts for its group as well as its own. The exceptions include a parent of a small group, and a parent that is itself included in the consolidated accounts of a larger group.
For financial years beginning on or after 6 April 2025, a group is small if it meets at least two of the following, measured across the group:
- Turnover of no more than £15 million net, or £18 million gross.
- A balance sheet total of no more than £7.5 million net, or £9 million gross.
- No more than 50 employees.
Questions we’re often asked
Do I need consolidated accounts if my group is small?
Not usually, but you can choose to prepare them, and lenders or investors sometimes ask for them. We tell you whether the exemption applies and whether it is worth using.
Can I take money out of a trading company into the holding company?
Usually, yes. Dividends between UK companies are generally exempt from corporation tax, which is how many groups move surplus cash away from trading risk. We check the company has the distributable reserves first.
Does each company still need its own audit?
Not always. A subsidiary that is part of a small group may be exempt, and a UK subsidiary of a larger group can be exempt if its parent gives a guarantee. Our audit page explains the options.
Should my property be in a separate company?
Often it makes sense, but moving it has tax costs as well as benefits. We look at stamp duty land tax, capital gains and how the property will eventually be passed on or sold before we recommend anything.
Rules and limits checked 9 October 2026.
Talk to us about your tax.
A free call with the team. We’ll contact you within 24 hours.