Community Interest Company Tax Calculator
Calculate Corporation Tax and the dividend cap for Community Interest Companies (CICs). CICs are subject to an asset lock and a 35% dividend cap on distributable profits, while paying normal Corporation Tax.
Frequently Asked Questions
What is a Community Interest Company (CIC)?
A CIC is a type of limited company designed for social enterprises — businesses that primarily aim to benefit the community rather than shareholders. CICs are regulated by the CIC Regulator and must pass a 'community interest test'. They are subject to an asset lock (assets cannot be distributed to private individuals except within the dividend cap).
Do CICs pay Corporation Tax?
Yes — CICs pay Corporation Tax on profits at the same rates as ordinary companies (19% or 25% in 2026). CICs do not receive any special tax status or relief compared to ordinary limited companies. If they register as charities, different tax rules apply (but CICs cannot simultaneously be charities).
What is the CIC dividend cap?
CICs limited by shares can pay dividends to shareholders, but the aggregate dividend is capped at 35% of distributable profits. The remaining at least 65% must be reinvested in the community purpose. There is also a cap on the interest rate payable on loans from investors (Bank of England base rate + 4%).
Can CICs claim Gift Aid?
No — CICs are not charities and cannot claim Gift Aid on donations. However, if a CIC receives donations from individuals, those donors cannot claim Gift Aid relief either. This is a significant disadvantage compared to charities for fundraising purposes.
What is the CIC 'asset lock'?
The asset lock means CIC assets must be used for the community purpose and cannot be distributed to private individuals above the dividend cap. If a CIC is wound up, any remaining assets must be transferred to another asset-locked entity (another CIC or a charity). This provides confidence to funders and investors.
Is a CIC better than a charity?
It depends on the purpose: CICs are more flexible (can trade freely, pay dividends within the cap), while charities have more beneficial tax treatment (Gift Aid, rates relief, income tax exemptions). Many social enterprises use a CIC for trading and a charity for grant fundraising alongside.
Can CIC directors be paid?
Yes — CIC directors can receive market-rate salaries. This is different from some traditional charity governance rules. The CIC Regulator reviews director remuneration in the CIC report and accounts to ensure it's appropriate relative to the community benefit delivered.
How do you form a CIC?
Incorporate via Companies House using CIC-specific articles of association that include the community interest statement and asset lock. Submit a CIC36 form (community interest statement) to the CIC Regulator alongside incorporation. Registration costs are £35 for online registration.