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Re: Debian UK

Andrew Suffield <asuffield@debian.org> writes:

> On Tue, Sep 06, 2005 at 10:40:23PM +0100, Rich Walker wrote:
>> In the UK, VAT registration is *required* if you are "in business"[1]
>> and your 12-month *turnover* exceeds £60000. Probably this is not an
>> issue for this organisation at present.
> VAT registration isn't the one you need to worry about. Debian-UK
> isn't going to be shifting that much money in a hurry.
> Corporation Tax is the one to worry about. The limit for that is only
> £10,000 per financial year. I just ran a few quick projections based
> on the reports in the debian-uk@chiark archives, and it's reasonably
> likely that it'll be over that limit next year, given the current rate
> of growth in sales. It might be over this year, that's hard to

Well spotted, that man.

> predict. Corporation Tax also applies to members associations, clubs
> and societies at the same rate as for registered companies. Basically
> any group of two or more people that handles money and isn't a charity
> is going to have to pay Corporation Tax; HMRC's definition of
> "company" is "anything that owes us money and isn't an individual
> citizen".
> Corporation Tax requires annual tax returns and notification that the
> company exists, and HMRC is going to come along and audit anything as
> weird as Debian-UK fairly quickly, so the accounts had better be in
> order, backdated six years. Failure to file the tax returns in a
> timely manner results in a fine of £100/£200 plus 10%/20% of the
> unpaid tax, depending on how untimely you are. Failure to have your
> accounts in order when they audit results in HMRC conducting an
> autopsy of the company.

I assume that someone is even now writing a quick script to import the
historical accounts into sql-ledger (which does a pretty good job of it)
so the previous years reports can be produced on demand?

> It may also require a tax return to be filed for years when the
> association is below the limit. I'm not sure about that. If it does,
> the same penalties apply. Ask a chartered accountant.
> And those penalties can probably be applied against any members, since
> it's not incorporated with limits on liability.

Incorporate a company limited by guarantee, rather than a company
limited by shares. (Avoids the whole shareholder issue; and they're
expected to be a bit weird).

> Bugger.

No, that's what the taxman might do.

rich walker         |  Shadow Robot Company | rw@shadow.org.uk
technical director     251 Liverpool Road   |
need a Hand?           London  N1 1LX       | +UK 20 7700 2487

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