Working for a non-profit and taxes Working for a non-profit and taxes
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  1. #1

    Nervous Newbie


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    Default Working for a non-profit and taxes

    I have a company in the UK (Ltd) and work for a non-profit organization based in Lichtenstein.

    The non-profit sends payments to my Ltd in form of grants, they don't require or accept any invoices from my Ltd. I need to create invoices in order to keep record of the received payments anyway.

    I'm not sure whether I need to pay corporation tax from the profit made working for a non-profit organization?

    I've contacted my accountants to ask this question, the reply was that I need to pay it - they probably want to play it safe so they say it's needed. However, I'm still not convinced and I'd rather not pay the tax if it's not really required.

  2. #2

    Prof Cunning @ Oxford Uni

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    You made the profit, you pay the tax. The type of organisation it came from does not mean that you can avoid paying tax on your profits!
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  3. #3

    Nice But Dim

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    Quote Originally Posted by peter77 View Post
    I have a company in the UK (Ltd) and work for a non-profit organization based in Lichtenstein.

    The non-profit sends payments to my Ltd in form of grants, they don't require or accept any invoices from my Ltd. I need to create invoices in order to keep record of the received payments anyway.

    I'm not sure whether I need to pay corporation tax from the profit made working for a non-profit organization?

    I've contacted my accountants to ask this question, the reply was that I need to pay it - they probably want to play it safe so they say it's needed. However, I'm still not convinced and I'd rather not pay the tax if it's not really required.
    Yes you need to pay it. Corporation tax is payable on Profits regardless of the source of the income.

    The only way to not pay CT is to not make a profit.
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  4. #4

    Super poster

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    HMRC guidance says that it is likely that they are:

    BIM40451 - Business Income Manual - HMRC internal manual - GOV.UK

    Grants which meet revenue expenditure, such as interest payable, are normally trading receipts.

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