Hi Mauree n Treadwel,
We are sorry you have not received a reply to your original letter. Depending when it was sent, it highly likely not to have been assigned yet for a response. We currently have large arrears of post.
In response to your enquiry:
‘Not for profit’ and ‘limited by guarantee’ does not mean a Company doesn’t need to complete company tax returns and isn’t liable to pay corporation tax.
If you trade and make a profit, you’ll need to pay corporation tax and file a company tax return in the same way as any other limited company.
The question really is ‘are you active’ for corporation tax purposes.
We consider your company to be ‘active’ for Corporation Tax purposes when it is, for example, carrying on business activity, trading or receiving income.
There are some circumstances, where we would not consider your company active for Corporation Tax purposes. In this case, your company or organisation is ‘dormant’, for example not active or not trading.
What is active for Corporation Tax purposes
Generally your company or organisation is considered to be active for Corporation Tax purposes when it is, for example:
• carrying on a business activity such as a trade or professional activity
• buying and selling goods with a view to making a profit or surplus
• providing services
• earning interest
• managing investments
• receiving any other income
This definition of being active for Corporation Tax purposes is not necessarily the same as that used by HMRC in relation to other tax areas such as VAT, or by other government agencies such as Companies House.
It may also not match definitions in the various accounting conventions that are used to prepare audited accounts, such as the Financial Reporting Standards issued by the Accounting Standards Board, or the International Financial Reporting Standards issued by the International Accounting Standards Board.
More detail here:
Corporation Tax: trading and non-trading
Grants are covered here:
BIM40451 - Specific receipts: grants and subsidies: introduction
After considering this, if you confirm you are not active, we can note our company tax record ‘Dormant’ and company tax returns will not be required.