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: 153
Latest Activity: Jun 14

Discussion Forum

Minimising Corporation Tax - again! their grant in the first 3 Replies

Hello allMy pro-bono CIC client incurred capital spend in their first year when all income was grant funded. They didn't spend all the grant so I used your helpful tip elsewhere to take only the…Continue

Tags: Capital Allowances, CIC, CT600

Started by Paul Johnson. Last reply by Paul Johnson May 17.

Pay, national insurance tax etc. 1 Reply

Really new to all of this so sorry if this all seems obvious. How do i set up paying the directors and how do i set wages. Is it better to set wages low for the first year and the raise them or have…Continue

Started by Brendan. Last reply by Alastair Irvine May 13.

Are Grants Taxable? Am I Trading? 3 Replies

not necessarily. Its complex. Some general principles:- A Grant will start out life as being a taxable receipt of a CIC. Unless you can think of a clever wheeze it will remain taxable. This is the…Continue

Tags: grants, trading, tax

Started by Alastair Irvine. Last reply by Paul Johnson May 13.

Donations and turnover 4 Replies

Canvassing for opinion - aware that donations to CIC's are liable to corporation tax but would a donation to a CIC be subject to VAT.  Opinion given to us suggests that is counted as such but I…Continue

Started by Rachel Gardiner-Hill. Last reply by Rachel Gardiner-Hill Mar 16.

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Comment by Margaret Manuell on August 17, 2011 at 15:03

Hi 

Our problem was eventually solved by an accountancy firm acting as our tax agent pro bono. Because of the nature of our activities and the fact that directors/members are volunteers and receive no share payments, all income being returned to further our community work, we are counted as non-trading and only have to pay tax on any interest (if any) we earn from reserves.  I thought this might be of interest to other similarly set-up c.i.c.s

Comment by Margaret Manuell on June 4, 2011 at 0:03

Hi Heidi

Thanks for your reply.  Unfortunately this year they have changed CT600 and it no longer looks like it did.  It's no longer an online form but a downloaded Adobe pdf with encrypted permissions, which requires either Adobe 9 or 10X. I filled the old online form without problems last year & sent up the pdf documents in support.  This year the form is more complex.  It asks for full details of directors. It also requires information about accounting models and depreciation rules and lots of other stuff in supplementary boxes, before going on to profit & loss (by which time it's reached number AC 12, and instead of a simple turnover and expenses declaration, each is broken down into sub divisions that mostly don't have anything to do with our activities.  I will try just putting in our gross figures and see if the form will accept them, if not we'll have to pass the hat round to pay for an accountant. 

Margaret

Comment by Heidi Fisher on June 3, 2011 at 14:08

Hi Margaret

You can use the forms that HMRC provide online to complete your tax return.  This will enable you to also submit the accounts in the right format for HMRC.  To do this you would need to be registered with HMRC's online services.  There is a demo of their system (I'm not sure how good it is!) at http://www.hmrc.gov.uk/demo/organisation/corporation-tax/

 

In relation to the income and expenditure categories, you would be entering your income under Turnover at Box 1 (assuming that it is not Government grants that are not taxable), and then entering your surplus at Box 3 and again at Box 5.  If you have no other income or losses then this figure is also entered at Box 21 and 37.  Then you would need to calculate the tax payable.

 

If you are still having difficulty completing this using their online system, it may be that you need to get an accountant to file this for you.  From 1 April the accounts have to be submitted in IXBRL format and the tax returns must be submitted online, so its not as straight forward as it used to be.

Comment by Margaret Manuell on June 2, 2011 at 21:37
Hi - I'm looking for help.  Form CT600  defeats me completely & don't know how to proceed. We are a 'not-for-profit' social enterprise. None of our directors are paid as directors and they hold no shares. Any cash remaining at the end of the year is put towards future services. We operate an income and expenditure account, showing income from funding, local partnership service agreements and a small amount from donations, and occasional stall selling or raffling gifted items and small purchases, and expenses including free-lance practitioner fees. We have no staff and do not have the funds to employ an accountant.
Our "profit" last accounting year was less that £600, and apart from about £4000 of equipment bought, mostly from funding, or inherited from our previous existence as a constituted association, and we have no other assets.   I filed our simple accounts and did the required company report at CH months ago but am absolutely stuck on the tax returns to HMR&C. Last year I was able to upload our pdf documents - copies of what we returned to CH - and using a simple online form which has now been superseded. We are finding it very difficult to fill in tax form CT600 because so many of the categories do not match the sort of income and expenditure categories applicable to us, and the notes aren't very enlightening. Basically, nothing fits.  I've tried my best, I keep getting the dreaded red boxes telling me there are errors. 
 I've calculated the tax owing and paid it, but the cut-off date for filing the returns is looming.  Can you advise us of any other way that small community interest companies can submit accounts to HMR&C other than by CT600.  The information on directors has already been filed at CH.
 

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