[cma-l] Charitable Status

Sun Feb 6 11:56:03 GMT 2011

A CLG/Charity *can* register for VAT and depending on activity may
be able to reclaim some or all input tax.

Education and training are tricky areas, but not impossible. If you are
making substantial capital purchases in a CLG/Charity there are 
legitimate ways
to organise this so that the VAT can be recouped.

It depends on what the items are used for *in the VAT year* in which they
are purchased. Last time I dealt with a VAT registration for such an org
(which *was* accepted and able to reclaim VAT) there appeared to be a
certain amount of flex and discretion and interpretation. Depending what the
first answer is it may be as well to stick or twist ..

Ask a friendly charity accountant for 10 minutes' advice.

Chris P
WFM

Ian Hickling wrote:

>  
> Well -  no - which is why I wrote it that way.
> The CIC works exactly as does a Limited Company (but is not entitled 
> to style itself "Limited") and is run within its Articles (and 
> Memoranda) by a Board of Directors  - not as a club or association 
> with Members and a Constitution.
> Because it is not entitled to make a profit it will not now be 
> accepted by HMR&C for VAT registration and hence cannot claim back 
> Input Tax.
> That is why the commercial limited company is required to be a 
> separate trading unit in order to be able to make unrestricted 
> profits, reclaim VAT and feed funding back to the CIC.
> Corporation or any other Tax will only be paid on profits and 
> correctly-organised accounting will ensure that this is minimised.
> If properly set up, the whole system can be run on a few days a year 
> by one sensible (probably retired) person who does not have to be an 
> accountant but has basic mathematical skills and on an ordinary PC 
> with no special software and three simple spreadsheets.
>  
> ------------------------------------------------------------------------
> To: transplanfm at hotmail.com; office at ccr-fm.co.uk; info at a-bc.co.uk; 
> cma-l at commedia.org.uk
> From: tlr at gairloch.co.uk
> Subject: Re: [cma-l] Charitable Status
> Date: Sun, 6 Feb 2011 00:10:44 +0000
>
> 1 & 3 can be combined in a company limited by guarantee with a 
> suitable constitution, which is in effect what most of us do, isn't it?
>
> If you run part of the operation as a company returning profits it is 
> subject to Corporation Tax isn't it?
>
> Alex
>
> ----- Reply message -----
> From: "Ian Hickling" <transplanfm at hotmail.com>
> Date: Sat, Feb 5, 2011 18:57
> Subject: [cma-l] Charitable Status
> To: "office at ccr-fm.co.uk" <office at ccr-fm.co.uk>, "Glyn Gloss" 
> <info at a-bc.co.uk>, "cma-l" <cma-l at commedia.org.uk>
>
>  
> As I have said many times - the obvious solution is to run three 
> businesses concurrently:
>  
> 1 - The Community Radio station as a CIC which does not return a profit.
> 2 - A Charitable arm which can accept charitable donations which does 
> not retrun a profit and feeds the station.
> 3 - A commercial limited company which can return a profit from a wide 
> range of activities, is VAT-registered and feeds the station.
>  
> It's sensible business practice - not rocket science.
>  
> To lose that much VAT by default is just plain stupid - sorry!
>  
> ------------------------------------------------------------------------
> From: office at ccr-fm.co.uk
> To: info at a-bc.co.uk; cma-l at commedia.org.uk
> Date: Sat, 5 Feb 2011 14:34:48 +0000
> Subject: Re: [cma-l] charity status
>
> Glyn n’ all
>
>  
>
> Thanks Glyn …………. As I said …. It looks like everyone is fumbling 
> around in the dark. Either we can as a fraturnity / brotherhood or we 
> can’t …….. which is it …. ??  I dunno’?
>
>  
>
> Regards
>
>  
>
> Nick
>
>  
>
> ------------------------------------------------------------------------
>
> From: glyn.m.roylance at googlemail.com 
> [mailto:glyn.m.roylance at googlemail.com] On Behalf Of Associated 
> Broadcast Consultants
> Sent: 04 February 2011 22:59
> To: Office - ccr-fm
> Cc: CMA-L
> Subject: Re: [cma-l] charity status
>
>  
>
> Yes we had the same experience.  Essentially we discovered that a 
> community radio station could not be a charity unless it fulfilled one 
> of a number of narrow categories .  ie: if we decided to be a 
> religious radio station then bingo, but we did not want to go that way.
>
>  
>
> Instead we went down the CIC route.  It was "sold" to us as being 
> equivalent to being a charity, but from a recent approach from Inland 
> Revenue I think it might have some drawbacks compared to being a 
> charity (they seem to treat us like any other ommercial Ltd company) - 
> but I'm not an expert.
>
>  
>
> Glyn Roylance
>
> GLOSS FM.org
>
>  
>
> On 4 February 2011 18:16, Office - ccr-fm <office at ccr-fm.co.uk 
> <mailto:office at ccr-fm.co.uk>> wrote:
>
> Dear All
>
>  
>
> Just a quick enquiry ………………. Does anyone know how many Community Radio 
> Stations in our fraturnity/brotherhood are actually charities ??     I 
> know that we looked into it 7 years ago but the process was a complete 
> nightmare. Also, in 2004 I clearly remember that the Charities 
> commision simply had NO category for radio ….. it was almost as if 
> they didn’t understand it >?>?                              I think 
> the key to it and the crux of the matter was that we were technically 
> ‘’all over the place’’ in what we were providing ……… in otherwords, 
> providing a lot, but nothing specific !                            
> almost          ‘’a jack of all trades but master of none’’
>
>  
>
> Have any of you guys had a similar experience ?                       
> I seem to recall that there is a station on the south coast as a 
> charity ??              plus         Regen (near to us) in South 
> Manchester who do run Wythenshawe FM and ALL FM ……………… outside of 
> that, I’m a bit clueless to be honest ……. Any ideas ?
>
>  
>
> What about Sheffield and of course the CMA ?
>
>  
>
> Many thanks
>
>  
>
> Regards
>
>  
>
> Nick
>
>
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