Corporation tax for CIC

Hi, I have just registered a CIC - we are a youth organisation running sessions for the community. Our entire income is from grants or donations. We take no profit and all of the funds we raise will be spent on the young people we work with - if we end the year with any surplus, this will be reinvested into the CIC for the following year. Will these grants and donations be taxable?

Hi John Hopkins,
HMRC guidance on the taxation of CICs is available at CTM40145 - Particular bodies: clubs: Community Interest companies. 
Grant income is subject to the normal taxation rules, and the tax treatment of grants will depend on whether they are capital or revenue in nature.
HMRC guidance on the tax treatment of grant income is available at BIM40451 - Specific receipts: grants and subsidies: introduction. 
Whether a particular receipt is taxable depends upon the facts of the case.
The tax treatment of donation income depends on the character of the income in the company’s hands. 
HMRC guidance to help you decide whether the income is a taxable receipt is available at BIM15035 - Trade profits: receipts not chargeable - source doctrine and
BIM41810 - Specific receipts: voluntary receipts: others.
Thank you.

Thanks so much for your reply. I just wanted to clarify - if we received a grant for £25k to hire a staff member employed at £25k pa, my understanding is that this would be a trade receipt, as it is a grant to cover revenue. Does this mean we would therefore have to pay tax on the grant, leaving us without the entire amount being covered for the staff member's salary? Thank you.

Hi John Hopkins,
Thank you for your query. 
Grant income that is revenue in nature and relates to trading activities will be subject to corporation tax. If you have received a grant to defray a specific expense, there may be no tax liability even though the income itself is taxable. 
If the grant is to be used to offset future expenses, you may find the guidance here useful:
BIM42215 - Deductions: timing: deferred revenue expenditure
HMRC is not able to provide specific tax advice.
If, after consulting HMRC guidance, you still need advice about the accounting and tax treatment of grant income, you will need to speak to an accountant. 
Thank you.