Generally, companies are liable to Corporation Tax on their taxable profits.
Some members' clubs, associations, societies, Community Amateur Sports Clubs (CASCs), and other unincorporated organisations may also be liable for Corporation Tax.
This page should help you decide if your club or other organisation is liable for Corporation Tax and what you need to do if it is.
It will also help you work out if your organisation or any of its activities are exempt from Corporation Tax.
On this page:
CASCs are sports clubs that are registered with HM Revenue & Customs (HMRC).
Sports clubs are liable for Corporation Tax on their profits but may qualify for tax relief to reduce their Corporation Tax bill. There are also other reliefs that clubs may be able to claim.
Additionally, some CASC activities are exempt from Corporation Tax. Provided that the income and/or gains generated by your CASC are used only for what's known as a 'qualifying purpose'. Generally, a qualifying purpose is providing facilities for eligible sports and encouraging people to take part in them.
In addition CASCs are exempt from Corporation Tax on:
If your CASC is liable for Corporation Tax, it's normally subject to Corporation Tax deadlines and requirements. These include telling HMRC that it's liable, paying any Corporation Tax due and filing a Company Tax Return on time.
The following unincorporated organisations are generally subject to Corporation Tax deadlines and requirements:
The taxable profits or surpluses of these organisations are subject to Corporation Tax.
If your unincorporated organisation is liable for Corporation Tax, it's normally subject to Corporation Tax deadlines and requirements.
HMRC may treat some clubs and unincorporated organisations with very small tax liabilities, (collectively known to HMRC as 'small clubs'), as dormant for Corporation Tax purposes.
To qualify, both of the following must apply:
If both these statements apply, HMRC will not send you a 'Notice to deliver a Company Tax Return' and will treat your organisation as dormant. They will review this at least every five years.
Additionally, and for each year of dormancy, your club or organisation must not have any:
What organisations are not covered by this exemption?
Most clubs and unincorporated organisations with very small tax liabilities are covered by the exemption except for the following:
Flat Management Companies
HMRC may apply this treatment to your property management company - whether it’s incorporated or not - if, as well as meeting all the criteria laid out in the previous sections, it meets all of the following additional criteria:
But if your flat management company receives service charges which it must hold on trust for its tenants, it will be liable to Income Tax on any interest that arises on that fund. In effect, your company is acting as a trustee and may be required to deliver a tax return to the relevant HMRC Trust Office.
Income from service charges for UK properties that's held on trust is chargeable at the standard tax rates. For example, basic rate in the case of bank interest as trustees are not entitled to starting rate for savings income.
Generally, where the income is below £1,000 and taxed at source, you won't need to complete a return every year.
What to do if your organisation is treated as dormant
Most existing organisations and flat management companies that meet the necessary conditions for this exemption will already be treated as dormant by HMRC. If you've received a letter from HMRC to say your organisation is to be treated as dormant, you don't need to contact HMRC until the end of the dormancy period.
However, if your circumstances change and you think you may need to complete a Company Tax Return you must contact your Corporation Tax office immediately.
If you're an unincorporated organisation you must provide a copy of your latest set of accounts. But if you're not obliged to produce accounts by your constitution or rules you must provide a copy of your:
If you are a flat management company you must provide a copy of your latest set of accounts.
After HMRC reviews this information they will write to you to let you know if you need to complete a Company Tax Return or if they need any further information.