CIC Association

Serving Community Enterprise

OK, my first post, but hopefully a stimulating starter for 10!
I work in business advice for socal enterprise development and continue to find Social Enterprises that involve groups moving or considering the move to Registered Charity status, with or without a trading arm.
The economic and PR benefits appear to be considerable, especially where land and buildings are concerned.
At the same time, this traditional, tried and tested model seems to have limited limitations.
CIC's certainly have their place, not least for indiciaul social entrepreneurs.
What have others found?
What do you think??

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Replies to This Discussion

Hi Brian

I think there will be a lot of CICs that will transition into charities, or start a charity to move some of the groups activity/assets into a more tax efficient structure, as you say the benefits do make sense in a lot of situations. As you know yourself its the activity restrictions that are the main limiter on charities, and more beuracratic operational procedures. This by default limits the charities economic abilities.

I think to answer why CICs at all in the context of your question, I would say its to allow charity organisations to expand their spheres of operational capacity, and to create extra income to assist their objectives. Moving forward I see a lot of positive interaction between the two groups, charities will now be able to invest in more innovative solutions via the CIC, in many ways I think its a match made in heaven!
I know I am a late poster on this thread but one thing that I was reminded of by this message was what I had recently read on the campaigning group, the Charity Tax Group's website, which says that due to a European Directive charities are classed as the final consumer for VAT purposes and are therefore unable to claim their VAT back. For a charity this would have to be a very important consideration as the money paid out in VAT can be very high with no opportunity to claim it back and is an added burden when the rate is to raise to 20%.

The CTG website page with further information on this subject is at
I think I get CIC's ............. but! ....... hand on heart I'm not quite sure - or is that convinced? - that the CIC form adds much to the well established "Charitable Company Limited by Guarantee with a separate, wholly owned Trading Company Ltd by G'tee"?
I can see a real place for CIC's - eg: for those who don't want, or cannot form charities.
But the inherent Corporation Tax and Business Rate liabilities of a CIC seem to limit the model where larger groups/organisations are concerned.
Mind you, when SE's registered as charities can gain these advantages, whilen commercial competitors in the same market cannot, does pose interesting questions about the level playing field?!



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