What is it?
A Community Benefit Society (CBS, also known as Society for the Benefit of the Community or Bencom) is a registered society that has an asset lock, so that its assets cannot be distributed to its members in the event of a winding up, and surpluses cannot be paid to members by way of a dividend. It has limited liability. A CBS is controlled democractically by its members on a one member, one vote basis, even if some members have more shares than others. It is recognised as a form of co-operative by Co-operatives UK.
Unlike other structures, registered societies including CBSs are exempt from the Financial Services and Markets Act 2000, which means they are able to seek social investment direct from the public in the form of loan stock or shares.
What are the accounting and filing requirements?
- Accounts need only comply with the FRSSE.
- Accounts need to be filed with the Financial Conduct Authority within 7 months of the year end, together with form AR30.
What are the tax implications?
- Must register for VAT if making taxable supplies over the threshold.
- Must file a corporation tax return. If the activity of the CBS is non-business and philanthropic then it may be possible to get HMRC to make the corporation tax record dormant, so that returns do not need to be filed.
- If a registered society pays interest to a creditor or member who is an individual, it need not deduct tax, but must make a return of interest paid within 3 months of its year end (S887 Income Tax Act 2007).
Slade & Cooper services
- Preparation of accounts and accountant’s report or audit exemption report
- VAT advice so you know when registration might be necessary, and can deal with any partial exemption and outside the scope issues.
- Corporation tax returns and iXBRL tagging of the accounts
- Payroll bureau
- If taxable activity is insignificant we can help to have the organisation’s tax record made dormant.