Not for profit company limited by guarantee CT600

We are a not for profit company limited by guarantee and I am trying to find out if we need to submit a CT600. Although we have received some grant funding, we do not trade and grant monies are invested in the project. Volunteer directors are unpaid and receive no income other than expenses. The reason we have not registered as a Charity is that the Charity Commission asked non covid related voluntary organisations not to apply as they were overstretched. Registrations appear to have reopened and we are now applying. I am aware that as a charity a CT600 exemption would be applied. Please could you advise? I did write to HMRC about this but, I expect for covid related problems, we did not get an answer. Can you help?

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.

Thank you.  



 

Thank you. That is very helpful. Following your links, I notice this statement "What is not active for Corporation Tax purposes There are a number of circumstances where HMRC would generally consider your company or organisation not to be active for Corporation Tax purposes. ........ HMRC considers that your company or organisation has not yet become active or started trading if it has not yet engaged in any business activity (business activity means carrying on a trade or profession, or buying and selling goods or services with a view to making a profit or surplus). Since we have not and have no plan to make a business or surplus, I assume we should apply to be dormant? Thak you again,

Hi,

Generally, a company 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.  


If you determine that the company is not active for Corporation Tax purposes and has not yet received a ‘notice to deliver a Company Tax return’ you can advise us that the company is dormant online.

If you’ve already received a ‘notice to deliver a Company Tax return’ you will need to file this online to demonstrate that the company was dormant for the period.    www.gov.uk/file-your-company-accounts-and-tax-return


Thank you.