CIC Association

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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: 134
Latest Activity: on Wednesday

Discussion Forum

VAT advice 2 Replies

Hello,I'm a Trustee for a small health charity, based in London, and we are considering converting to a CIC. I'm concerned about the VAT implications and am looking for advice around this.Has anyone…Continue

Tags: charity, London, accountant, VAT

Started by Mufeedah Bustin. Last reply by Andrew Fleet on Wednesday.

Dormant accounts for first year of trading 1 Reply

Hi, I am helping a friend with their CIC accounts and have a few queries.It says on Gov.uk that if you registered for Corporation Tax before your accounting reference dateYou usually:don’t file a tax…Continue

Started by Louise poor. Last reply by Andrew Fleet on Wednesday.

Filing Account Returns for Dormant CiC 1 Reply

Hi, I need help in filing our account returns with HMRC s we are yet to commence activities since our registration. Do i need to prepare any document or P&L account even when there is nothing to…Continue

Started by Lanre Olabode. Last reply by John Mulkerrin Aug 2.

Classic Employed/Self Employed question 2 Replies

posted by Caroline DrakeGood morning,My friend and I have set up Lovemindfulness cic to teach mindfulness in schools. We have established with the local authority that we are exempt from ir35 because…Continue

Tags: CIC, employed/self, cic, a, in

Started by John Mulkerrin. Last reply by Geoff Jul 27.

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Comment by Fiona lipscombe on Monday
It is tricky - can you recommend an accountant as the ones we know don't seem to know.
Comment by John Mulkerrin on Monday

Well, if you have a trawl through all the old discussions on here you will get a lot more detail but in essence roughly the same message. Firstly Its a bit of a tricky area so you should get professional help. 

But, in many circumstances it is possible for CIC Directors to receive payment from a CIC for Non Director activity conducted on behalf of the CIC.

If the individual can show other earnings in these areas of activity that should generally satisfy the rules on being regarded as separate employment to the CIC.

Here's a good previous thread and there are a few if you look back http://cicassoc.ning.com/group/accountsgroup/forum/topics/director-...

Comment by Fiona lipscombe on Monday
We don't have an accountant as such as we haven't need anyone as yet but have been in touch with 4 and no one seems to know. The CIC regulator has said we can do it by self assessment.
Comment by John Mulkerrin on Monday

Hi Fiona

The position is as it is for normal companies, so very surprised about HMRC response. 

Its generally the detail around your other jobs, do you have an accountant or would like me to recommend one to you?

Comment by Fiona lipscombe on August 9, 2017 at 10:54

Advice please! 

We are a newly formed CIC (started in November 2016) and run a community Festival. This year we covered our costs and have £20,000 extra to pay the 5 Directors. We don’t know whether we can do this on a self-employed basis and invoice the CIC and declare it under our individual self-assessment returns or have to set up a PAYE under the CIC Company.  We all have other jobs and do this part time. The payments will be £10,000 to one Director and £2,500 to the other 4. The jobs the Directors do are as follows:- Overall responsibility for the Festival,  Social media, Entertainment Director, and Technical and Financial Support.

 

There is no guarantee in the future that there will be a payment so as of now this is a one off sum. There is no employment contract or anything in our Articles of Association about Directors payments as we cannot be sure we will have enough money year on year. We are not in a position to pay monthly salaries

 

I’ve contacted the HRMC and various accountants by phone and no one seems to be sure what the position is. Can you help?
Comment by John Mulkerrin on June 20, 2017 at 16:33

@ 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 June 20, 2017 at 16:12

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.  

 

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