We are a group of volunteers acting as small company limited by guarantee. We put on music events in our area. In the past we have just about broken even and so tax has not been an issue. We have received some grants and sponsorship which I guess are treated as taxable income. Tax returns have been filed along with accounts to Companies House.
None of the group receives any payment for the work that they do. Going forward it is likely that we will make a small surplus which would be used to fund a festival next year. Am I right in saying this surplus would be treated as taxable? Can we ( legally!) avoid this?
Should we regroup as a charity or perhaps a CIO?
Many thanks in advance.