CIC Association

Serving Community Enterprise

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Accounts Group

For any accounting related queries, including accounts software package questions, grants and trading income treatment, HMRC or Companies House queries/issues, tax reliefs for CICs, links to useful finance information etc

Members: 129
Latest Activity: on Tuesday

Discussion Forum

Cash flow forecasting 2 Replies

We are trying to establish the best way to forecast our financial status on a quarterly basis. One of our board members wants to analyse our accounts each month, working out from income and…Continue

Started by Allan Craig Muirhead. Last reply by Andrew Fleet May 3.

Need for VAT registration?

I'm the director of a CIC and I'm looking for advice regarding the need to be VAT registered, or not. In brief, we deliver community projects focused on the repair and regeneration of youth club and…Continue

Tags: VAT

Started by Tim Reading Feb 21.

Accounts Format 7 Replies

Hi all,Unfortunately, I have had my accounts declined twice by Companies House, even after I did everything as they asked me to do! Does anyone have a sample of any accounts for a small company they…Continue

Started by Samina Noor Deen. Last reply by Samina Noor Deen Feb 9.

Just set up a CIC limited by guarantee and need some advice 2 Replies

Hi,This is my first time experiencing setting up a business and I have just registered my company 'Burwell Skate School CIC', it is limited by guarantee. I am pretty confused about a majority of…Continue

Started by Max Jamieson. Last reply by Jane Mellor Feb 8.

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Comment by John Mulkerrin on Tuesday

@ Jonathan David Griffiths- Definitely can run a Charity and CIC in tandem should you choose (and the issue of business rates and whether your local council will give the CIC discretionary business rate relief could also be an important metric.

In any event if the activity itself is 'charitable' then a CIC can use Localgiving.com as well to accept donations with Gift Aid

Best of luck 

Comment by Jonathan David Griffiths on Tuesday

We are not-for-profit organisation who have recently registered as a CIC. Our project is looking to raise funds through donations and private funding to purchase and renovate a building for multiple use. With offers of large personal cash donations plus a cinema club (an entrance fee is charged) we wondered if it would be possible to operate as a Charity and CIC combined so we could get Gift Aid on large donations as well as small supporters fees (which allow discounts into films) ?

Comment by Dean on March 23, 2017 at 22:46

Hello all,

Although not a CIC, I am developing a social enterprise with scope for asset lock. I am searching for an accountant. Someone ideally in Scotland (ideally north) with whom I can build a business relationship with as opposed to a throw away accountant. At present, I am struggling with profit and loss statement, and balance sheet projections. Would anyone be able to offer some help, please?

Comment by Rachel Gardiner-Hill on November 25, 2015 at 13:27

Hi Heidi

That is  massively useful information.  Thanks.

Rachel

Comment by Heidi Fisher on November 25, 2015 at 11:52

Hi Rachel,

Yes Adrian is right about being able to defer grant income to future periods if the expenditure is going to be in the following period.  In terms of corporation tax the rate is 20%.  If you have purchased capital assets then you can claim capital allowances which would reduce the amount of corporation tax due.  The regulator would not be expecting you to show a loss or break even position - this is a misconception around CICs - CICs should be making a profit - otherwise you are always struggling financially and will never have any reserves.  There is a balance to be had between spending the money to reduce your profits and therefore pay less corporation tax, and building up your reserves (which would involve paying more corporation tax) in order to provide some security if you have a drop in income in the future or have unexpected costs.  

The whole point of a CIC is to make profits/surpluses and to use those profits to benefit the community.  This is the key difference between a CIC and a normal limited company - the use of the profits you generate.  

Comment by Rachel Gardiner-Hill on November 24, 2015 at 22:00

Thanks Adrian that's really helpful.

Rachel

Comment by Adrian Ashton on November 24, 2015 at 21:32

corporation tax applies to all declared profits - however, if you're planning on using surpluses to reinvest against costs that you know will be being incurred in the coming financial year, then your accountant should be able to help you present the accounts in this way accordingly on an accruals basis...?

(however, am sure there are proper accounts here that can phrase that far more properly than I can - hopefully Heidi Harris can best advise as she specialises in CIC accounts)

Comment by Rachel Gardiner-Hill on November 24, 2015 at 20:32

Can anyone clarify the situation re CIC's and corporation tax, I absolutely get it that we have to pay it if we generate a profit.  The reason I ask this is because it is likely we will reach our year end with a small surplus that it feels prudent to hold as we may have to move premises next year.  However the impression I get from our accountant is that the regulator would expect that we would only be breaking even or making a loss?

Having always worked in the charity sector I am finding this tension in the CIC model between holding funds and having to spend them pronto before the year end quite difficult.

Also can anyone clarify what rate of corporation tax any surplus might generate, I am talking small here £2k or less.  

Thanks.  Rachel

Comment by Rachel Gardiner-Hill on April 20, 2015 at 13:50

Thanks John I thought that might be the case.

Comment by John Mulkerrin on April 15, 2015 at 15:54

Hi Rachel

You cant get both!

 

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