Community Interest Company (CIC) Corporation Tax Calculator

Yes. A Community Interest Company is a limited company and is liable to Corporation Tax on its taxable profits, just like any other UK company. Unlike a charity, a CIC does not enjoy general exemption from Corporation Tax. It pays tax on trading profits, investment income and chargeable gains, subject to the usual rules and reliefs.

It depends on the level of taxable profits. Profits up to £50,000 are taxed at the 19% small profits rate. Profits of £250,000 and above are taxed at the 25% main rate. Profits in between benefit from marginal relief, giving an effective rate that rises gradually from 19% to 25%. These thresholds are adjusted where there are associated companies.

Marginal relief reduces the tax that would otherwise be payable at the 25% main rate. The formula is (upper limit − augmented profits) × (taxable total profits ÷ augmented profits) × the marginal relief fraction of 3/200. Where the company has no franked investment income, the calculation simplifies to (upper limit − profits) × 0.015, which is then deducted from the tax at the main rate.

Associated companies are companies under common control. Where they exist, the £50,000 and £250,000 profit thresholds are divided by the total number of associated companies plus one. For example, with one associated company (two companies in total), the thresholds become £25,000 and £125,000. This prevents groups from benefiting from the small profits rate multiple times.

Common add-backs include client and staff entertaining, depreciation and amortisation, donations that are not eligible for Gift Aid or charitable relief, fines and penalties, and any other expenses not incurred wholly and exclusively for the purposes of the trade. Capital expenditure is dealt with through capital allowances instead of depreciation.

A CIC cannot claim Gift Aid or the charitable tax exemptions available to registered charities, because it is not a charity. Some CICs may be eligible for Social Investment Tax Relief on qualifying investments. Speak to a specialist CIC accountant to understand which reliefs apply to your circumstances.

A CIC must file its Company Tax Return (CT600) with HMRC within 12 months of the end of its accounting period. Corporation Tax itself is usually payable nine months and one day after the end of the accounting period. Late filing and late payment both attract penalties and interest.