Community Interest Companies
Accounts and compliance for community interest companies.
A community interest company is a limited company registered at Companies House and regulated by the Office of the Regulator of Community Interest Companies. CICs pay Corporation Tax normally and cannot claim Gift Aid or charitable rate relief. Every CIC must file annual accounts together with a community interest report (CIC34) demonstrating it has operated for community benefit. Directors also carry standard Companies Act duties alongside the additional obligations imposed by the CIC Regulations.
CIC34
Community interest report filed with annual accounts at Companies House
9 months
Accounts filing deadline (Companies House private company rule)
Statutory asset lock
Assets and profits committed to community benefit, not private distribution
The problem
What makes community interest companies accounting different.
CIC34 filing alongside annual accounts
Every CIC must file a CIC34 community interest report at the same time as its annual accounts at Companies House. The report must describe activities carried out for community benefit, explain how directors have consulted the community, and demonstrate how assets and profits have been applied. A filing fee applies. Generalist accountants who do not work regularly with CICs frequently miss these requirements or conflate them with charity reporting obligations.
The asset lock and dividend restrictions
The statutory asset lock means CIC assets must be retained for community benefit and can only be transferred to another asset-locked body. CICs limited by shares are also subject to a dividend cap set by the CIC Regulator, limiting what shareholders can receive. Directors need to understand the boundaries and document that distributions comply with the cap, since breach triggers regulatory action.
Corporation Tax: no charity reliefs
Unlike charities, CICs receive no charity tax reliefs. They pay Corporation Tax on trading profits normally, cannot claim Gift Aid on income received, and are not eligible for charitable rate relief. If a CIC sits alongside a connected charity and channels profits to it, the tax treatment of that arrangement needs careful analysis under the trading subsidiary rules.
Directors from community and voluntary backgrounds
Many CIC directors come from the voluntary or community sector rather than a commercial background. They may be unfamiliar with Companies Act duties, confirmation statement deadlines, or the consequences of late filing. The CIC Regulator can take action for failures that sit alongside Companies House enforcement, so compliance gaps carry two sets of consequences.
The work
How we help community interest companies.
Annual accounts and CIC34
We prepare the annual accounts and the community interest report (CIC34) together, and manage the Companies House filing within the nine-month private company deadline. The CIC34 narrative is drafted to meet the Regulator's expectations on community benefit, consultation and asset application.
Corporation Tax and trading structure
We calculate and file the Corporation Tax return, advise on the VAT treatment of the CIC's activities, and where appropriate explain the trading subsidiary model for organisations that sit alongside a connected charity.
Asset lock and director compliance
We advise CIC directors on the asset lock rules and dividend restrictions, help document that distributions comply with the cap set by the Regulator, and flag upcoming Companies House deadlines so nothing is missed.
FAQ
Common questions
- Can a CIC claim Gift Aid?
- No. CICs are not charities and cannot claim Gift Aid on income. They also do not qualify for charitable rate relief. These reliefs are available only to bodies recognised as charities by HMRC. If Gift Aid eligibility matters to your organisation, the legal structure would need to be a registered charity rather than a CIC.
- What is the CIC34 and when must it be filed?
- The CIC34 is a community interest report that every CIC must file at Companies House alongside its annual accounts. It sets out the activities carried out for community benefit during the year, explains how the directors have consulted the community, and shows how assets and profits have been applied. A filing fee applies. The deadline follows the standard Companies House private company rule: nine months after the accounting reference date.
- Does a CIC pay Corporation Tax?
- Yes. A CIC pays Corporation Tax on its trading profits in the same way as any other limited company. There are no special charity-equivalent reliefs. CICs are regulated by the Office of the Regulator of Community Interest Companies, not the Charity Commission, and HMRC treats them as standard companies for tax purposes.
- What is the CIC asset lock?
- The statutory asset lock means that CIC assets and profits must be used for community benefit. Assets can only be transferred to another asset-locked body. CICs limited by shares are also subject to a dividend cap restricting what shareholders can be paid, with the cap set by the CIC Regulator. Breaching the asset lock or the dividend cap exposes directors to regulatory action.
Speak to a specialist.
Tell us about your community interest companies and we will arrange a short introductory call.