Clubs and associations- Back into the Corporation Tax net ?
Will your club or association start having to pay tax ?
With the withdrawal of the nil starting rate for all entities subject to Corporation Tax there has been concern that many small clubs and societies will fall into the Corporation Tax net and need to complete returns and pay corporation tax in respect of very small sums of income.
However, HMRC have announced that where the annual corporation tax bill for a club (or unincorporated association) is less than £100 and the club is run exclusively for its own members, then they will prevent the issue of a notice to file returns and treat the club as dormant, subject to a five year review.
This seems a very sensible move although, as always, the guidance is subject to a number of matters so if you are associated with a club or association you will need to look at the small print to see if it qualifies.
Date: 7th May, 2007
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