Anger over Almondsbury village shop's corporation tax bill
OUTRAGE has swept the village of Almondsbury following news that its non-profit community store was being forced to pay more corporation tax than multi-nationals like Starbucks.
Almondsbury shop, which was recently nominated for a regional award, is run by a total of 90 volunteers and is effectively a charity in everything but name.
Its profits are split between the village’s Scout and guiding units and various groups and sports associations. This year alone, the community shop donated £10,000 towards local causes.
But even more could have been set aside for charities had the shop’s management committee not been obliged to "squander" £1,000 on corporation tax.
Almondsbury store chairman Alun Evans helped set up the store in 2009 to allow elderly and disabled people unable to travel to big supermarkets on their own to shop locally.
He told the Gazette he was appalled to see global corporations like Starbucks get away with paying just one per cent of their earnings in tax over 15 years when a small village shop was "hounded" by HMRC for 20 per cent of their annual profits.
"We can ill afford it," he said. "The very fact that they are charging corporation tax to a volunteer business is scandalous. Starbucks doesn’t pay corporation tax.
"The only reason we make a profit is that we volunteer. We would not have any money to distribute otherwise."
When the shop was initially set up, it was registered by the taxman as a dormant company given its non-profit structure. But at the end of 2011, volunteers were told by HMRC that their case had been reviewed and they would not be exempt from paying corporation tax anymore.
"I appealed to get charitable status since our profits are either donated or invested in the long-term future of the shop but they turned us down," Mr Evans added.
"We’ve been told we are a fantastic example we are of what the Big Society is about but we are liable to pay corporation tax.
"If people donate to us, and they have done in the past, any donation or grant will be treated as income and they would increase our tax. It’s an absolute joke."
Using the village store changed loyal customer John Tovey's life after he lost his sight as a result of diabetes, nearly three years ago.
He said: "It's disgusting. It's a vital part of this community. If they got forced to close a lot of people would suffer."
An HMRC spokesman said: "If a company or organisation is trading, receiving income or carrying out business it is usually deemed to be ‘active’ for corporation tax purposes. Most unincorporated associations, including friendly societies and provident societies, are also liable to corporation tax."