Community Interest Company

[hannah40]

Can some one explain why I need to pay tax on my CIC.? I run a support group for Adults with LD and they cook there lunch and play sports .
We pay music licence insurance rent and equipment and internet usage and there transport to come to group.
They pay membership of £50 per month and we have 10 members.
We have £1.000 left in the bank as we were given a grant during covid now we are told we need to pay £250 tax on the £1.000 we have left.
I thought business tax was paid if you earned a certain amount?

[bobbinwales]

Whose said you need to pay £250 tax hannah?
The tax would be on profits surely for 2019/20. Profits are the same think as cash/bank balance

[bobbinwales]

Do you produce annual accounts, profit and loss ect

[Peter Pedant]

// we are told we need to pay £250 tax on the £1.000 we have left//
by whom?
and isnt the sensible course to ask whomever said you had to pay
tax - why?

[bobbinwales]

How much was your covid grant?

[Buenchico]

It might be worth arguing with HMRC that your CIC is a non-trading company:
https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm40145

[bobbinwales]

My last sentence at 1933 should of said ' Are not the same thing'