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Corporation Tax - Company Limited by Guarantee

Corporation Tax - Company Limited by Guarantee

Hello, I hope someone can help!

I am a CIMA public sector accountant but I have recently taken on a voluntary role with a small not for profit organisation. Unfortunately they need to submit their first set of accounts to companies house in a week's time!

I have prepared the accounts and from what I can see they owe a fair amount (relative to their size) in corporation tax. They are funded by grants and donations, and mostly organise events and raise awareness.

Is there any way I can avoid this? If they were to apply for charitable status after paying HMRC, could this amount be claimed back?

Many thanks in advance for any help!


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By zebaa
29th Jun 2012 18:02

Unlikely, but give it a go. First you pay whatever tax is owed, then you prove it should not have been due. I tried it, on advice, with an organisation with a tax bill of a little less than £100k several years ago. After spending about £5k, and getting a thumbs down from HMRC, we decided not to take it further because the cost would really go up on appeal - lawyers on £300 pound an hour, that sort of thing...

You need to prove there is no commercial intent behind any transaction, in a nutshell. 

Thanks (1)
29th Jun 2012 18:10

Hello Thanks for the reply!

That's what I thought - I've advised them to pay and then we will look into it afterwards but I'm not hopeful. Still though I'm not an expert so it's re-assuring to get a second opinion.


Thanks again


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By Old Greying Accountant
30th Jun 2012 00:51

Presumably ...

... you still have three monhs to file the CT600. I would provide the CT and file at Companies House (I think this must be paper, and that you cannot file online for this type of company) and then negotiate with HMRC about whether active for CT or not.

You can pay it, but if you don't you will only get interest charged, which is not that high a rate, but don't submit CT600 until as late as possible, as if they don't know the amount, they can't chase, just issue gentle reminders!

If you decide no CT due simply reverse the provision next year.

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01st Jul 2012 18:58

PM sent but

If this is a truly charitable set up that just forgot to register then treat as charitable, appologise profusly and get on with registration sharpish


You should have got it all sorted out by the time HMRC get round to replying

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