CIC Association

Serving Community Enterprise

CICs providing Educational Activities Do we have to Pay VAT or Corporation tax

Hi Just wondered if anyone could shed any light on whether we have to pay any kind of tax as we are a CIC who is just about to reach the threshold . We deliver educational activities to schools for the bulk of our work. Other programmes deliver work readiness programmes and Youth Clubs. thanks 

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You have to pay Corporation Tax if you make a profit and if you trade with the intention of making a profit. This is nothing to do with VAT.

You have to register for VAT if your taxable supplies breach the threshold. Education is a difficult area, so you should read this http://www.hmrc.gov.uk/charities/vat/income.htm#8

Hi Alistair.. I am also a CIC trading as a non profit organisation supporting children with challenges.  We have been running for just over a year and I am having trouble with getting my head around Corporation Tax, I understand that this has to be paid if we go over the threshold but does this also include any grants that we have won.  It seems wrong that grant money we receive will be taxable if in our bank at year end!  I think we are able to accrue some of it but not all.  Because of this, we are thinking about changing over to a Charity, do you have any expertise in this matter?  I would truly love some support if possible.  Many thanks  

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