"In terms of a corporate wishing to donate to charitable body, they would probably prefer a charity but only for the assurance its doing good stuff not because of any tax law (Charities are better understood than CICs). The true answer is more…"
I have recently set up an organisation as a C.I.C, our principal aim isto sell our products and services to raise money for rainforestprotection. Essentially 90% of our revenue be transferred directly torainforest charities we are supporting, with 10% being kept by theorganisation for our running costs.I understand that because my organisation is a C.I.C and not a charitythen corporates that trade with us will not benefit from tax relief. Soif tax relief was their primary concern and they had…See More
Actually the tax relief a corporate body obtains on its corporate Gift Aid donations to charities, whilst not the key motivation for the gift, is nonetheless important to that corporate donor.
CICs have no special tax reliefs, unlike charities - as you will sadly know by now. This is one of the deterrents to the further growth of the CIC legal form.
For guidance on the Gift Aid regime and how corporate bodies can make donations under it to organisations recognised for tax purposes as charities (its a tax law test), see the guidance notes on HMRC's website:
To what extent you could use a charity alongside the CIC and what the relationship between them might potentially be is imposssible to say without knowing a great deal more about your situation and your ideas for the future. You do need to take specialist charity legal advice and some good tax advice (including on the VAT issues) - otherwise you may find some very unhelpful and even unpleasnat consequences. I'm happy to advise on a professional basis if you wish - do contact me.
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