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Corporation tax The following organisations are liable to Corporation Tax: Members’ clubs, such as social clubs and holiday clubs Societies, such as friendly societies and provident societies Co-operatives Other unincorporated associations
What is taxable? The following are all subject to Corporation Tax: Bank interest received Capital gains Rent from huts/property (to non members) Profits from trading i.e. selling guide books, calendars or clothing (to non members)
What is taxable? (continued) The non members clause depends on a clubs constitution! So you may be liable to pay Corporation Tax on: Surpluses made on membership fees Surpluses from fundraising events Corporation tax is charged at 21% for the first £300,000 of profit. 20% from 1 April 2011.
Corporation tax – ‘small clubs’ HMRC treat 'small clubs' as dormant for Corporation Tax purposes. To qualify, both of the following must apply: Your organisation's annual Corporation Tax liability must not be expected to exceed £100 You run your club or organisation exclusively for the benefit of its members HMRC will review this at least every five years.
Corporation tax – ‘small clubs’(continued) Additionally, and for each year your club or organisation is treated as dormant, it must not have any: Trading losses available for offsetting against profits Chargeable gains or disposals Anticipated payments from which tax is deductible and payable to HMRC, i.e. PAYE
Corporation tax – ‘small clubs’(continued) Most clubs and unincorporated organisations with very small tax liabilities are covered by the exemptionexcept forthe following: Privately owned clubs run by the members as a commercial enterprise for personal profit Friendly societies
Casc benefits No Corporation Tax to pay on: Trading profits, if the turnover is no more than £30,000 per year Income from letting property, if the rent is no more than £20,000 per year Any interest received Any capital gains made
Casc benefits (continued) Plus: Mandatory 80% rates relief The ability to claim Gift Aid on voluntary donations
Gift aid Gift Aid is a scheme for Charities and CASC’s to maximise the value of donations received. It is worth 25p for every £1 donated There is a temporary “top up” of 3p for every £1 donated until 5 April 2011 As well as benefitting the CASC, if the donor pays higher rate tax they can claim tax relief on Gift Aid donations.
Gift aid – what you can claim? Can be claimed on voluntary donations only, but…… Sponsorships Events Membership fees Auctions/kit sales
The benefits nobody talks about! Access to the following financial/fundraising institutions: CAF Bank – Banking, insurance & investments CTT – Charities Technology Trust Charities Trust – eBay for charity/Everyclicketc Justgiving Rememberacharity.org Virgin Money Giving