Corporation Tax

[Unwashed]

I'm looking into self-management and everything to do with it and I'd assumed that an allotment management company would be liable to corporation tax, but it says on the HMRC web site not so.  Anyone know anything about CT?

See here.

[Trevor_D]

I'm not a tax expert, but as I read it you're only liable for Corporation Tax on any profit. If you're a "not for profit" organisation, then you're not.

I think your link answers your question: allotment societies aren't liable.

In an allotment society, any surplus from one year is carried over to the next for possible future expenditure. We pay no salaries, nor have no shareholders; all "stock" is held in common.

In our case, we're a limited liability company, so all members are shareholders - to the tune of £1.00 - in case we ever face bankruptcy. (It does mean that we're regulated by the FSA and have to fill in an annual return, but that's fairly straightforward.)

Contact NSALG - OK, you already have! - and the FSA.

[Unwashed]

I'm not a tax expert, but as I read it you're only liable for Corporation Tax on any profit. If you're a "not for profit" organisation, then you're not.

I think your link answers your question: allotment societies aren't liable.

In an allotment society, any surplus from one year is carried over to the next for possible future expenditure. We pay no salaries, nor have no shareholders; all "stock" is held in common.

In our case, we're a limited liability company, so all members are shareholders - to the tune of £1.00 - in case we ever face bankruptcy. (It does mean that we're regulated by the FSA and have to fill in an annual return, but that's fairly straightforward.)

Contact NSALG - OK, you already have! - and the FSA.

Are you actually a private company limited by shares and not a private company limited by guarantee?

In what way are you regulated by the FSA?  Companies House I can understand, but not FSA.

As I see it not-for-profits still pay CT because not-for-profit just means dividends aren't paid to shareholders and even charities pay CT, but it's the line in the "who doesn't pay" that says "allotment and garden societies" because it also says that limited companies incorporated in the UK do pay CT, so if you're an incorporated allotment and garden societies do you pay or not?

I expect I'll have to ask HMRC, but I'm sure they won't give me a simple answer.

[Unwashed]

OK, I've found a bit more detail here.  Allotment societies incorporated as industrial and provident societys don't pay CT (mostly).  However, not paying CT doesn't appear to be exactly the same thing as not subject to CT so it might be that you break an HMRC rule by not filing a return on time even though you have nothing to pay.  I said it wouldn't be a simple answer.

It also says that unregistered allotment and garden societies should be treated in the same way.  I think this mean a society incorporated as an industrial and provident which isn't regsitered - who do IPSs register with?  The implication then is that an allotment society that's unincorporated or incorporated as a limited liability company is liable to CT.

Oh, right, it's falling into place now.  Industrial and provident societys register with the FSA, so that's what your society is then Trevor - and Companies House don't get the annual return, the FSA does.

[Trevor_D]

We're a Mutual Society, and originally - in 1910 - registered & regulated by the Industrial & Provident Societies Act (1893); now under the FSA, hence the annual return.

But I only deal with the historic back-lash; I don't know how you would set up a similar situation today, or even whether you'd want or need to. But I still think that CT isn't anything you need to worry about.

[1066]

Unwashed, based on my limited knowledge, what Trevor has written stands for most societies - i.e. Corp Tax doesn't apply, and the societies are regulated by the FSA.