Would be grateful for some advice please. i.e. if there is a way to convince HMRC to not to pay corporation tax when set up a ltd company for charitable purpose only.
Couple of individuals set up a ltd company for the purpose of providing charitable services to local community. Since setting up they have managed to raise funds of over £5k for the year. Individuals have not taken any money out for themselves and have no intention to reimburse themselves so far. They all have other full time jobs and this is a part time venture. The company is ltd by guarantee and any surplus will be reinvested.
Spoke with HMRC to try and avoid corporation tax on the surplus. They initally asked to send a request in writing. I did this, but they later came back saying need to complete online form CHA1 for the request. Completed this, but they have now come back saying no corporation tax exemption allowed. Reason being, income over £5k so need to register with the charities commission first and then to reapply for exemption via CHA1, they will consider then.
Individuals have said they rather not register with the charities commission yet. Is there a way to convince HMRC
Would appreciate a reply.