CIC Association

Serving Community Enterprise

More help for CIC's.

1  HSBC refuse to give us a business credit card because they insist we are a not-for-profit and MUST have a constitution whereas we are a CIC limited by guarantee with Articles of Association.

2 HMRC state CIC's show profits and must pay Corporation Tax but as a CIC has a "surplus" that is ploughed back into our business not a "profit" for directors.

3 99% of grant making trusts do not recognise CIC as having "charitable" objects whereas the Nat Lottery do?

CIC regulator needs to do much more to promote and educate HMRC, banks, accountants and the charity sector about CIC's.

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Comment by John Mulkerrin on June 19, 2016 at 12:21

Hi Geoff

Indeed! The weird thing is surely the terms and conditions of the credit card allow for a limit and a monthly minimum repayment? I know it sounds odd but I would wait until the card arrives and look at the paperwork. Sometimes, individuals at banks will try and rewind what they have said to you previously, and try to explain the solution making what they had said previously appear accurate. I agree it is odd.

All banks have occasionally expressed individual cases like this, I would simply say you could consider starting to plan for another bank. Not a full recommendation as such but the Co-op offer the community direct plus account, free to 1million turnover and very aware of what a CIC is.

3. If possible I would really like to take this discussion further with you, we dont really have tangible data/case studies to express this problem. If you can contact me at with any data I will definitely take it into the next technical panel that the CIC Regulator holds.

Are you CIC Limited by Guarantee or Share? 

In our recent survey we asked the question around Business rate relief as we knew there was an issue but we couldnt guesstimate how big, at least now we have something to work with (although solving the issue is not going to be easy if we can at all ) and we have a strong set of examples to make our case publicly with. On previously occasions we have written to funders asking them to review their policy and most are happy to do so.

As you'll notice from our survey 40% of CICs trying to secure funding in the last 12 months failed, if you can put together a note giving me some detail I can take it forward with other data.

We have an unequivocal call for more to be done on raising information and awareness generally (95% of survey respondents) and I'll be taking that strong message to the Regulator.


Comment by Geoff Holt on June 19, 2016 at 11:11

Dear John, many thanks for your response. In order; 

HSBC did finally agree to providing a credit card but strictly on the terms that we repay outstanding balances in full at the end of every month. So this is more like an overdraft facility, not credit. TBH, we would want to repay in full monthly anyway but I can't help feeling we are being penalised for some reason. You either offer credit or you don't, and, if you don't, I think we deserve a reason as to why not. We have a t/o in excess of £100k and have never gone £1 overdrawn.

2 Headmaster tone noted and suggestion to check elsewhere done - thank you

3 OK, 99% was an unscientific number but I know for sure that we made more than 50 applications last year to grant making trusts and only 1 had a policy to accept applications from CIC's.  Luckily, our corporate structure has an overarching charity with a series of CIC's operating below so, any grant making trust not accepting applications from CIC's, we make the application from the charity instead but it is frustrating that the charity grant making sector, certainly from our personal experience, does not seem to understand / recognise the CIC vehicle.


Comment by John Mulkerrin on June 14, 2016 at 20:22

Hi Geoff

Id certainly recommend re-posting in the Accounts Group, as many experts lurk there occasionally providing answers and lots of professionals offer their excellent services too if you need them.

1. I couldnt possibly understand what is happening here, your Articles are very much part of your constitution. Often the for profit/not for profit things is an issue, do you have anything written down from them? It always helps to ask for confirmation in writing as it is easier to pursue. What's the situation now? Happy to make a call if that will help

2. Appreciate your comments on getting help and advice here, but (being very proud of the service we have to now delivered for free with no central support) in my most stern headmaster voice would tell you that if you have a quick look at the member replies here

you can see the most recent 5 replies on the comment thread clearly show how to deal with this :-)

3. Where did you get that figure? Always happy to get involved in updating procedures, there are funders who only support Charity but mostly now Id say this is a reducing issue. Happy to be told different and look at any examples you have

Our recent survey has shown that 95% of members agree with you (me being one) that not enough is being done to promote, inform and improve understanding of what we do. 

I will put your comments in the notes for the next CIC Regulator technical panel meeting, and curious to hear what has happened with HSBC


Comment by Geoff Holt on June 14, 2016 at 14:53

Thanks for your comment Jane and John's quick reply. My post has been up for over a month with no response or help. I joined the CIC Assoc for some help or advice but not sure I have had either. John, can you comment or acknowledge the points I raise. Thanks. Geoff

Comment by jane elizabeth brook on June 14, 2016 at 14:20

That was quick! Thanks.

Comment by John Mulkerrin on June 14, 2016 at 14:05

Hi Jane

Please have a look at contributors here:

Many can help you, good luck

Comment by jane elizabeth brook on June 14, 2016 at 14:01

We are a community group who received a large grant £75,000 to set up an orchard in our village in 2014. Set up was carried out over 4 months. We now have to submit our accounts and are finding it difficult to find out what we need to do and especially if we need to pay Corporation Tax. Quotes from several accountants  we have approached seem very high (in the region of £800) and don't seem to be able to tell us if we need to pay this. Their payment seems to be based on the number of transactions which we had in that year which were a lot as it was the set up and we were spending the grant. As Geoff points out we are not-for-profit so our reserves and incomings are put back into the project.How can we find an accountant who really understands CIC accounts so that we do not end up paying more than we need to.

Jane Brook


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