Question 1

Taxing

Accepted Answer

Q: We have only recently formed a residents' association and now wish to open a bank account, for an unincorporated organisation, ie club account. One of the questions they have asked is whether we are eligible to receive interest free of tax. I telephoned HMRC this morning but they were unable to help me. They suggested I contact CAB! I would very much appreciate it if anyone can help me with this and also advise whether we would need to complete an annual tax return. Our annual income would not exceed £210, with expenditure of approximately £100 - £120 pa FPRA Hon Consultant Gordon Whelan replies: As an association you should receive interest earned gross from your bank. Indeed from 6 April 2016 most bank will only pay interest gross so it might be a good idea to check with the bank if this question is still relevant. With regards to your tax circumstances, HMRC treat an unincorporated association as dormant for Corporation Tax purposes if it is active or trading but it’s due to pay Corporation Tax of less than £100 for an accounting period. This appears to be the case given the income and expenditure profile you have described. However, if circumstances change and it appears that you will owe more than £100 then you should write to HMRC to let them know of the change in circumstances. [submitted March 2016]

Question 2

Taxing

Accepted Answer

Q: We have only recently formed a residents' association and now wish to open a bank account, for an unincorporated organisation, ie club account. One of the questions they have asked is whether we are eligible to receive interest free of tax. I telephoned HMRC this morning but they were unable to help me. They suggested I contact CAB! I would very much appreciate it if anyone can help me with this and also advise whether we would need to complete an annual tax return. Our annual income would not exceed £210, with expenditure of approximately £100 - £120 pa FPRA Hon Consultant Gordon Whelan replies: As an association you should receive interest earned gross from your bank. Indeed from 6 April 2016 most bank will only pay interest gross so it might be a good idea to check with the bank if this question is still relevant. With regards to your tax circumstances, HMRC treat an unincorporated association as dormant for Corporation Tax purposes if it is active or trading but it’s due to pay Corporation Tax of less than £100 for an accounting period. This appears to be the case given the income and expenditure profile you have described. However, if circumstances change and it appears that you will owe more than £100 then you should write to HMRC to let them know of the change in circumstances. [submitted March 2016]

Taxing

Search

Articles Archive