Can a CIC director bill the CIC for services?

I'm a director of a small CIC and would like to bill the CIC for services rendered as a trainer

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The CIC of which I am the sole director recently received a grant from the UN to provide a training programme to an NGO in the Gambia. The mainstay of the grant is for fees for two trainers to do this work. I am also the lead trainer. Moreover, the UN will need to see proof that the grant has indeed been spent on trainer fees. How then should I do this? Do I submit an invoice to the CIC as a self-employed trainer? 

Thanks for your responses.

 

Replies (14)

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By ngonyama
25th May 2024 13:13

It sounds like a huge conflict of interest, but with the UN being as dodgy as it is, they probably won’t mind. But ask your accountant…

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By Paul Crowley
25th May 2024 13:22

If the fee is less than £1,000 then sounds like a good idea. Tax efficient solution.

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Replying to Paul Crowley:
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By MacFosh
25th May 2024 14:14

Actually the fee is about $6600

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Replying to MacFosh:
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By Tax Dragon
25th May 2024 15:02

Not to worry. Even by his standards Paul was making an extraordinary number of unjustified assumptions. As well (I think, though I admit to some uncertainty as to his logic) forgetting all about s783AO of ITTOIA.

But none of this addresses your question about can you do it. You probably ought to have found that out (taking legal advice if necessary) before applying for the grant, maybe even before setting up the CIC.

I don't know the answer. Tbh I was surprised even that teaching abroad served the community interest - so what do I know? Might it be, if there's no blanket block, that there is a CIC-specific one?

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Replying to Tax Dragon:
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By Paul Crowley
25th May 2024 15:12

This supposed to be the UN. Assuming it is the United Nations one would hope that they understood the rules around UK CICs.
I would be more concerned about the way the training program costs are arranged given that a supply is being made to an African NGO.
Where will the staff be working is the first thought. Nothing has been said about who the members are, or where the activity is taking place.
If the training is in the UK, then that bit is trivial compared to the wider picture.
A CIC is just an ordinary trading company with a few extra rules, dividends being a specific one.
Directors are allowed to have reasonable remuneration.

But OP only asked about the training costs for himself.

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Replying to Tax Dragon:
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By David Ex
25th May 2024 15:13

Tax Dragon wrote:

lYou probably ought to have found that out (taking legal advice if necessary) before applying for the grant, maybe even before setting up the CIC.

+1

As a director, the OP should be familiar with the legal obligations of the position and the terms under which the grant was applied for and made.

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Replying to MacFosh:
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By Paul Crowley
25th May 2024 15:03

You will need to register for self-assessment if the fee exceeds £2,000.

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Replying to Paul Crowley:
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By MacFosh
26th May 2024 10:19

Thank you. I have no problem registering for self-assessment. Indeed, I am already registered as such. I just want to make sure that that is the most appropriate way forward.

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Replying to MacFosh:
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By Tax Dragon
26th May 2024 13:05

I did say that respondents in here answer based on assumptions. We all do it (assumption being one of the inevitable bedfellows of the inevitable gaps in information in OPs), but some assume more than others.

The older child of infogaps and assumption is unreliability. Basing what you do on responses you receive (or otherwise read) in here is at your own risk.

https://www.accountingweb.co.uk/any-answers/how-to-use-any-answers

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DougScott
By Dougscott
25th May 2024 15:27

What did you put in the grant application? Was it for trainer salaries? If so just pay the salaries from the company to you and ANOther.

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Replying to Dougscott:
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By MacFosh
26th May 2024 10:14

Thank you Dougscott
There are several costs in the grant application - including travel and accommodation etc. But fees for the two trainers are the biggest cost - they're the bit that require the most work. One of the trainers will be paid as an external consultant - that's not a problem. I'm just wondering whether it's okay to pay myself as a self-employed trainer, despite the fact that I'm also the director of the CIC.

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Replying to Dougscott:
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By MacFosh
26th May 2024 10:14

Thank you Dougscott
There are several costs in the grant application - including travel and accommodation etc. But fees for the two trainers are the biggest cost - they're the bit that require the most work. One of the trainers will be paid as an external consultant - that's not a problem. I'm just wondering whether it's okay to pay myself as a self-employed trainer, despite the fact that I'm also the director of the CIC.

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Replying to MacFosh:
DougScott
By Dougscott
26th May 2024 16:09

If you think that's the best way to arrange your affairs and the UN are happy for you to do so then it may be ok.

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By jonharris999
27th May 2024 07:18

TaxDragon has already correctly observed that there's too much we don't know here to give a good answer, but just to add that for me the first question would be is the company Ltd by shares or Ltd by gtee? (Other things being equal, and subject to all the other good points others have raised, I think the latter makes this manoeuvre more feasible.) (And if the former, my next question would be who the shareholders are.)

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