[Talk-GB] OSM leaving the UK?

[David Newton]

“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.”



“Money in is money in, it's all the same to HMRC.”



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.



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.



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.



David Newton

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