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<pre>“<span style="color:black">Yes, this isn't clear to many people but if you are a limited company then it doesn't matter much *why* someone gives you money, it's all the same for the taxman.”<o:p></o:p></span></pre>
<pre><span style="color:black"><o:p> </o:p></span></pre>
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<pre><span style="color:black">“Money in is money in, it's all the same to HMRC.”<o:p></o:p></span></pre>
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<pre><span style="color:black"><o:p> </o:p></span></pre>
<pre><span style="color:black">No. Absolutely not true at all. I work for a limited company. It is a private company limited by guarantee. It is also a charity. For a charitable limited company it very, very much matters why someone pays money to the organisation. For a charitable company any donation will never attract a charge for corporation tax ever. Even with trading it matters what type of trading it is. Primary purpose trading can be carried out by a charity to an unlimited degree and again will never attract a charge for corporation tax ever. Non-primary purpose trading is a different matter. What distinguishes primary purpose from non-primary purpose trading? Primary purpose trading is trading in advance of the charitable objectives of the organisation, where non-primary purpose trading is not trading in advance of the charitable purposes of the organisation. Primary purpose trading for a hospice would be running the hospice service. Non-primary purpose trading would be charity shops run to raise money for the hospice. That’s a simple example.<o:p></o:p></span></pre>
<pre><span style="color:black"><o:p> </o:p></span></pre>
<pre><span style="color:black">It is also true that different types of income have different rules for deduction etc when it comes to corporation tax. Formerly this was under the old income schedule system, but a similar distinction still exists: it’s simply called a different name now.<o:p></o:p></span></pre>
<pre><span style="color:black"><o:p> </o:p></span></pre>
<pre><span style="color:black">It may well be different for a CIC as opposed to a charitable company, however charitable companies are limited companies just as much as CICs are. So please don’t make blanket statements like those quoted above: they just show that you actually don’t know what you’re talking about.<o:p></o:p></span></pre>
<pre><span style="color:black"><o:p> </o:p></span></pre>
<pre><span style="color:black">David Newton<o:p></o:p></span></pre>
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