Latest rumour - is that HMRC are refusing to allow CICs to reclaim VAT input tax because a CIC cannot make a profit.
Can this really be true
Hi Trevor - any idea where this is coming from? Might need to talk to HMRC.
I seriously doubt this Trevor, there is clear guidance. We are treated exactly the same as a normal trading company. Im happy to take forward any particular issue with them directly if there is a problem.
What can and cant have VAT reclaimed can be difficult to fully understand, we have a number of tax experts in the group so if whoever told you this can give us more information we can check for them.
Generally speaking ive looked at a few cases like this, when we have gone into the detail it is usually a mis-communication between the accountant and the CIC, or the accountant hasnt fully understood what a CIC is and has made an innacurate statement to the CIC.
Thank you both - I was not convinced they were right. I was trying to persuade community radio stations nationwide that CIC is a good structure to adopt.
There is considerable resistance, often based on lack of proper information. The Charity Commission refuse to accept that community broadcasters are charities, so many are private limited companies, which also causes problems.