Quizzes & Puzzles8 mins ago
Corporation Tax
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I am involved with a dog club which has funds of around �15,000, some of which is in a savings account, but someone has said we would need to pay corporation tax on the interest. Can anyone suggest who/where we should contact to find out?
Answers
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I presume you are not officially a charity? If you were then normally the Revenue will grant tax exemption.
Technically if you aren't a charity then yes, you do have to pay Corporation Tax on any surplus or "profits" the club makes each year. Clubs are caught by the same tax regime as companies. It would be profits for the year for the whole club though, not just the interest. If you use the interest to fund activities then likely the taxable profit is somewhat lower?
Are you sure the clb is actually receiving the interest gross from the bank / building society? They should be but many don't. It might already be taxed at source.
In any event, in practice the Revenue aren't really interested in taxing "not for profit" clubs. If you basically break even in funds every year they won't be interested in you. They may however question why a "not for profit" club has �15k in the bank. It's certainly an indicator that the club is more professional than that.
All of which hasn't really answered your question has it? Legally yes you should be at least registered for corporation tax. If you phone the Revenue they'll no doubt ask you to do so but they almost certainly won't care if you don't do it, especially as interest is likely to be much less in the next period sadly.
Technically if you aren't a charity then yes, you do have to pay Corporation Tax on any surplus or "profits" the club makes each year. Clubs are caught by the same tax regime as companies. It would be profits for the year for the whole club though, not just the interest. If you use the interest to fund activities then likely the taxable profit is somewhat lower?
Are you sure the clb is actually receiving the interest gross from the bank / building society? They should be but many don't. It might already be taxed at source.
In any event, in practice the Revenue aren't really interested in taxing "not for profit" clubs. If you basically break even in funds every year they won't be interested in you. They may however question why a "not for profit" club has �15k in the bank. It's certainly an indicator that the club is more professional than that.
All of which hasn't really answered your question has it? Legally yes you should be at least registered for corporation tax. If you phone the Revenue they'll no doubt ask you to do so but they almost certainly won't care if you don't do it, especially as interest is likely to be much less in the next period sadly.
Just to correct my own answer, in fact with members clubs the revenue normally deem the funds to arise from the memebrs for the members and don't seek to tax.
So I was wrong most likely to suggest any surplus was technically taxable (though it still could be if it's derived externally from the members by for instance public entry fees or something). That is why with most clubs it's the interest only that is taxed.
But yes, to return to the original point you should be paying corporation tax on the interest.
So I was wrong most likely to suggest any surplus was technically taxable (though it still could be if it's derived externally from the members by for instance public entry fees or something). That is why with most clubs it's the interest only that is taxed.
But yes, to return to the original point you should be paying corporation tax on the interest.
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