There is no doubt that running a company in the UK means paying corporation tax. But what about other entities? Are clubs and associations also subject to corporation tax?
Who is obliged to pay corporation tax?
HMRC requirements such as:
- the obligation to declare that you are liable to corporation tax,
- paying corporation tax,
- filing a corporate tax return
do not just apply to companies. They also apply to founders of clubs, associations and other unincorporated entities.
Duty to notify HMRC of corporation tax liability – how does it work in practice?
If your organisation is liable to corporation tax, you must inform HMRC. They also need to know certain details about your organisation, which you provide on form CT41G (Clubs).
You are required to provide this information regardless of whether it has previously been provided in other tax areas (e.g. PAYE) or to another authority (e.g. Charity Commission).
Once you notify HMRC that your organization is subject to corporation tax, a CT41G (Clubs) form with your UTR number will be sent to you. Fill it out and return it to your Tax Office.
Is it always compulsory to pay corporation tax for clubs and associations?
HMRC will not normally require clubs and associations with very small tax liabilities (known as 'small clubs’) to file a corporation tax return. In certain circumstances it may treat your organisation as dormant for corporation tax purposes.
However, HMRC will regularly review your organisation’s tax position. If you are unsure about how corporation tax applies to your association or club, you should seek advice from your HMRC.
