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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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Particular bodies: clubs: Community Interest companies

Community Interest Companies (CICs) are a type of limited liability company designed specifically for those who wish to operate for the benefit of the community rather than for the benefit of the company owners (shareholders).  A CIC is incorporated under the Companies Act 2006 or its predecessors and it has to conform to company and insolvency law in the same way as other UK companies (though CICs have their own specific Company Law regime in Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004).

CICs may be companies limited by shares or by guarantee, or may be listed companies. They must have an ‘asset lock’ to prevent assets being distributed, e.g. to shareholders, except as permitted by legislation and are also required to satisfy a community interest test.  Profits and assets are retained within the CIC for community purposes, but they may also be transferred to another similar organisation such as another CIC or a charity, for example if the CIC is dissolved.  A CIC cannot itself have charitable status.

Taxation

A CIC is liable to CT as a company.  It will be chargeable on any trading profits (but it will be a question of fact whether or not a particular CIC is trading) and on its investment income and gains.

It is eligible for normal CT reliefs but there are no CIC specific tax exemptions/reliefs available.