Companies

[Nonimous]

Hello

A client has set up a company to raise funds to go towards a political aim.

The company is not a registered charity, therefore I'm assuming that all donations are liable to CT, and expenses such as staffing costs will be deductible.

Does anyone have any other ideas?

[Incredulum]

Raising frunds from whom, how, and to what aim?

[Nonimous]

The general public, by advertising, and to try to get a referendum on a certain matter.

[Incredulum]

No answers, but some thoughts:

First principles, a company is subject to tax on income. Income means trading income and there is lots of case law as to what constitutes a trade, which generally amounts to selling things, or giving advice etc. etc. Income also means investment income e.g. bank interest.

I suspect that donations from the public do not constitute income. Could a company have a "trade" of being a pressure group? I somehow doubt it.

Events (balls, fairs, parties) held to raise money quite probably would be trading income.

I bet anyway it makes a loss so tax on income wouldn't be a problem. And I presume the people starting it up will be putting in lots of money. If they lend the money in, or put it in as share capital, then it doesn't become income.

TSEM1150 suggests that a trust may be used and would have to make returns of income. Donations would not constitute income in a trust.

[Incredulum]

This I think may also help you.

http://www.hmrc.gov.uk/manuals/bimmanual/bim80105.htm

The corollary of course is that salaries etc. are not tax deductible - as there is nothing to deduct them from.