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: 163
Latest Activity: on Friday

Discussion Forum

Can my CIC buy things from me? 1 Reply

I’m opening a CIC bookshop and am starting off with the majority of my stock being my personal collection i have built up over the years. The majority I’m happy to donate, but there are some that are…Continue

Started by Sophie. Last reply by John Mulkerrin on Friday.

Allowable Expenses 2 Replies

Hi, I am trying to file our first tax return and would like advice as to exactly what expenses are allowed to be claimed. I travel extensively in Europe promoting a European wide environmental…Continue

Tags: expenses, aloowable

Started by Robert McBride. Last reply by Robert McBride Nov 22.

saving the CIC

Hi all, so yesterday I was in the postition where i thought that closing the cic was the best option due to falling trade. However, I think it MAY be possible to save it (with some great expansion…Continue

Started by emily woldon Nov 18.

difficult to find accountants to with advice with selling my BTL`s/ transfering to my CIC 1 Reply

Who would believe it, I ve had my cic dormant until now and wanted to see how i would either sell/transfer my personal 2 BTL`s to my CIC to support investment income to develop the cic to allow…Continue

Tags: to, a, cic?, property, personal

Started by Chris Tough. Last reply by John Mulkerrin Sep 13.

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Comment by Naresh Rao on November 28, 2017 at 0:09

Hi Jenny

CIC's are subject to corporation tax on any surplus they make. The "not for profit issue" relates to needing to reinvest any surplus to the business rather than distribute to shareholders.

If most of your income comes from grant then most should be spent on the projects that the grant was provided for, and so in the long run there is no profit as all the grant is spent.

But in any given accounting period if there is surplus, tax is payable.

I am happy to talk you through this over the phone if it would help.

Naresh Rao

NRL Finance Ltd

offering stress free business solutions to small businesses and especially CICs

M: 07526 716013

Comment by Jenny Tompsett on November 27, 2017 at 18:22

Hi-can anyone advise me on the position of CICs in relation to Corporation Tax ? We are a small Company Limited by Guarantee and we provide educational art facilities. We get the majority of our income from grants but we also charge a subscription for use of our supervised workshop by artists and we charge for art courses many of which are for disadvantaged groups. We do not regard ourselves as "trading with a view to making a profit" although for the last few years we have made small surpluses which add to our reserves and which will in future be ploughed back into our social enterprise objectives. We have had conflicting advice from accountants and I can find no definitive ruling on HMRC's or other websites. The theorists say that we are subject to CT and others say not. Does anyone have first hand knowledge of  HMRC disputing the "not trading with a view to making a profit" argument ? Many thanks in advance

Comment by Fiona lipscombe on August 14, 2017 at 15:09
It is tricky - can you recommend an accountant as the ones we know don't seem to know.
Comment by John Mulkerrin on August 14, 2017 at 14:54

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 August 14, 2017 at 14:34
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 August 14, 2017 at 14:30

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?

 

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