Just become involved with a CIC which is non-profit making - it obtains grants and the provides special needs education support programs paid for out of the grants.
CIC guidelines suggest that a CIC can be non profit making but that it is also subject to corporation tax - therefore how do you prevent the non-expended amount of a grant in an accounting period from being subjected to corporation tax.
Have thought about grant income possibly being classed as exempt or accruing for costs to come but is there another way.
Grateful for any guidance
Related resources
Replies (1)
Please login or register to join the discussion.
Special Rules for CICs
You should check on the special rules relating to Community Interest Companies and the special annual CIC Report that needs to be filed and in particular your CICs status under the "asset locking" rules. In respect of the Accounts, CIC are subject to the Public Benefit Entity reporting requirements under which certain CIC's have been required to report under FRS102 sine 2015. You should therefore check this out - in particular the rules relating to income recognition. (I tend to think grants received in advance of the expenditure to which the grant related should be recognised as a creditor rather than as income).
I am not sure about the Corporation Tax reporting issues, I haven't found anything specifically related to CICs, but Charities (and CIOs "charitable incorporated organisations") do have to complete a special CT600. Other types of organisation are not required to file unless they have income subject to tax, whereas other not for profit organisations complete a standard CT600 each year but with a covering certificate claiming the tax exemptions for that year.