Commentary on Sections Section 3: Connected persons
54.Subsections (1) and (3) provide that where, at the beginning of the tax year, there are two or more connected companies, which are not charities, which would each qualify for the employment allowance only one company is eligible for the employment allowance for the tax year.
55.Subsections (2) and (3) provide that where at the beginning of the tax year there are two or more connected charities which would each qualify for the employment allowance only one charity is eligible for the employment allowance for the tax year.
56.Subsection (4) provides that it is up to the companies or charities to decide which one of them will qualify for the employment allowance.
57.Subsection (5) introduces Part 1 of Schedule 1 which sets out the rules for determining if two or more companies are "connected" with one another.
58.Subsection (6) introduces Part 2 of Schedule 1 which sets out the rules for determining if two or more charities are "connected" with one another.
59.Subsection (7) defines "charity and company" for the purpose of section 3 and Schedule 1. It defines "charity" as having the same meaning as in the Small Charitable Donations Act 2012, subject to paragraph 8(5) of Schedule 1, and "company" as having the same meaning as in section 1121(1) of the Corporation Tax Act 2010 and as including an LLP.