Do you need HMRC extra support?
Are you prepared as HMRC targets Marginal Relief Claims in their new “One-to-Many” letter campaign
HMRC has launched a fresh round of targeted correspondence under its ‘one-to-many’ letter initiative — this time aimed at companies that may have incorrectly claimed Corporation Tax marginal relief by failing to declare all associated companies on their tax returns.
The campaign began on 21 July 2025 and will run until 6 October 2025, with thousands of businesses expected to receive letters. HMRC’s approach is based on its internal analysis, which has flagged companies where submitted Corporation Tax returns show claims for marginal relief but do not include all associated companies, as required under the legislation.
Marginal Relief and the rules on associated companies
Marginal relief was reintroduced on 1 April 2023 to soften the jump in Corporation Tax from the small profits rate to the main rate. It generally applies to companies with taxable profits between £50,000 and £250,000, so that the tax rate gradually increases from 19% to 25% between these thresholds.
However, these thresholds are not fixed. If a company has one or more associated companies during an accounting period, both the lower and upper limits are reduced in proportion to the number of associated entities. This means the presence of associated companies can significantly reduce or even remove eligibility for marginal relief altogether.
The letters being issued state:
“We have information that shows your company has associated companies, but hasn’t declared them when claiming Marginal Relief on a Company Tax Return. Having associated companies reduces the taxable profit limits for claiming Marginal Relief. This means your company may owe more Corporation Tax.”
The HMRC “one-to-many” letter strategy
In this campaign, HMRC is using two versions of the letter. While the core content is the same, the tone and structure vary slightly. One of the versions contains an additional “What happens next” section, explicitly warning that HMRC may open a compliance check if the recipient does not respond.
HMRC has confirmed that issuing two variants is deliberate — part of an effort to test whether tone and framing influence the speed and quality of taxpayer engagement however, they are also championing the HMRC extra support function to assist taxpayers.
Example HMRC letter content
An example of the standard wording includes:
Check you’ve paid the right amount of Corporation Tax
We’re writing to you as a company officer of [company name]. Our records show that your company may have paid the wrong amount of Corporation Tax.
We have information that shows your company has associated companies, but hasn’t declared them when claiming Marginal Relief on a Company Tax Return. Having associated companies reduces the taxable profit limits for claiming Marginal Relief. This means your company may owe more Corporation Tax.
The associated companies we know of are listed below:
Associated companies
[Associated company names]
What you need to do within 30 days:
- Check all your Company Tax Returns for periods including and after 1 April 2023.
- If a return is incorrect and within the 12-month amendment window, file an amended return.
- If outside the amendment period, make a voluntary disclosure.
- If you believe your returns are correct, explain why no associated companies should be declared.
Failure to correct an inaccurate return could lead to penalties.
The letter also encourages recipients to contact them and search for “HMRC extra support“.
What HMRC expects from recipients
Companies receiving one of these letters are asked to review the relevant Corporation Tax returns and respond within 30 days. Depending on the findings, this may mean:
- Amending a return if within the statutory filing window.
- Submitting a voluntary disclosure if outside that period.
- Providing a written explanation if no amendment is required.
HMRC has made it clear that if a company ignores the letter and later turns out to have underpaid, penalties could apply. However, they are offering you the opportunity for help by the way of the HMRC extra support function.
Practical takeaways for businesses
The scope of the campaign means that many legitimate businesses may be caught simply due to misunderstanding the associated companies rules. In practice, “associated” covers more than just subsidiaries — it includes any company under the control of the same person or group, which can easily extend across family or investment structures.
Even where no additional tax is due, responding promptly and accurately is essential to avoid escalation into a formal enquiry. It is important to remember that if you need help the HMRC extra support function is available.
HMRC extra support – how can RPGCC help?
RPGCC’s London based Corporation Tax specialists hae extensive experience helping companies navigate HMRC’s “one-to-many” campaigns.
We can:
- Review your returns to confirm whether associated companies have been correctly declared.
- Calculate the correct marginal relief entitlement based on your group or ownership structure.
- Prepare amendments or disclosures to minimise potential penalties.
- Draft clear, compliant responses to HMRC to prevent unnecessary compliance checks.
If you have received one of these letters — and have tried the HMRC extra support link already or if believe you might be at risk — it’s vital to act quickly.
Contact us on 020 7870 9050 or email our tax team at hello@rpgcc.co.uk and we can work with you to ensure your tax position is reviewed and any issues are addressed before the 30-day deadline expires.
