Fair Tax Mark Statement for Lendology CIC (February 2024)
This statement of Fair Tax compliance was compiled in partnership with the Fair Tax Foundation (“FTF”) and certifies that Lendology CIC (“the Company”) meets the standards and requirements of the FTF’s UK Small Business Standard for the Fair Tax Mark certification.
Tax Policy
The Company is committed to paying all the taxes that we owe in accordance with the spirit of all tax laws that apply to our operations. We believe that paying our taxes in this way is the clearest indication we can give of being responsible participants in society. We will fulfil our commitment to paying the appropriate taxes that we owe by seeking to pay the right amount of tax, in the right place, and at the right time. We aim to do this by ensuring that we report our tax affairs in ways that reflect the economic reality of the transactions that we undertake during the course of our trade.
We will not seek to use those options made available in tax law, or the allowances and reliefs that it provides, in ways that are contrary to the spirit of the law. Nor will we undertake specific transactions with the sole or main aim of securing tax advantages that would otherwise not be available to us based on the reality of the trade that we undertake. The Company will never undertake transactions that would require notification to HM Revenue & Customs under the Disclosure of Tax Avoidance Schemes Regulations or participate in any arrangement to which it might be reasonably anticipated that the UK’s General Anti-Abuse Rule might apply.
We believe tax havens undermine the UK’s tax system. As a result, whilst we may trade with customers and suppliers genuinely located in places considered to be tax havens, we will not make use of those places to secure a tax advantage, and nor will we take advantage of the secrecy that many such jurisdictions provide for transactions recorded within them. Our accounts will be prepared in compliance with this policy and will seek to provide all the information that users, including HM Revenue & Customs, might need to properly appraise our tax position.
Our Company Information
Lendology CIC is a community interest company, originally established in August 2002, with the principal activity of making loans to vulnerable households to make improvements to the conditions of houses to meet modern day standards of comfort.
The Company is limited by guarantee, incorporated in England & Wales, and consequently does not have share capital. There are no beneficial owners as the Company is not established or conducted for private gain: any surplus or assets are used principally for the benefit of the community.
The Company’s eight directors are also currently its members, and they make decisions either unanimously or by majority of votes.
For the year ended 31 March 2023, total directors’ remuneration amounted to £142,718, with the highest paid director’s remuneration being £ 61,776.
The registered office address of the Company is Heatherton Park Studios, Heatherton Park, Bradford On Tone, Taunton, Somerset TA4 1EU, which is also its trading and head office address.
Our Tax Disclosures
The Company’s average profit before tax over the three years ended 31 March 2021 to 31 March 2023 was £29,985. The expected tax charge on these profits at the headline rate of 19% would be £5,697. The actual average current tax charge over the same period was £3,795(12.7%) and the reason for this being less than expected is explained below in the following tax reconciliation with accompanying footnotes:
| £ | |
| Average profit before tax | 29,985 |
| Average expected corporation tax charge (19.0%) | 5,697 |
| ¹Trading losses utilised | (1,611) |
| ²Expenses not deductible for tax purposes | 83 |
| ³Accelerated capital allowances | (152) |
| ⁴Super-deduction capital allowances | (222) |
| Average actual current tax charge (12.7%) | 3,795 |
As at 31 March 2023, the Company had a deferred tax asset of £905 in respect of accelerated capital allowances; after crediting £711 to the Statement of Income and Retained Earnings to reduce the total tax charge in the accounts. The Company expects this deferred tax asset to unwind and impact corporation tax bills in annual instalments over the useful economic lives of the assets subject to capital allowances claims.
Accelerated capital allowances arise when there are fixed asset temporary differences between the net book value of qualifying assets in the accounts and their equivalent tax written down values (see ³ Accelerated capital allowances above/below). The Company’s deferred tax asset position has arisen because depreciation and amortisation charged on qualifying assets have exceeded tax deductible capital allowances as at 31 March 2023.
¹ Trading losses utilised – Tax losses from earlier periods can be carried forward and relieved against future profits, so that the correct amount of tax is applied to the overall historic profits generated, and not just for that period. Once the tax losses have all been used, tax will then become chargeable on the profits generated thereafter.
² Expenses not deductible for tax purposes – Some business expenses, although entirely appropriate for inclusion in the accounts, are not allowed as a deduction against taxable income when calculating the tax liability. Examples of such expenses are: customer entertaining; or fines and penalties.
³ Accelerated capital allowances – The accounting treatment of capital assets is usually different than the tax treatment allowable. This is because, in the accounts, an asset is depreciated over its useful economic life. Whereas capital allowances are set rules in tax law applied to the type of asset. The differences, however, between the depreciation rate in the accounts and capital allowances claimed in the corporation tax return – are only timing differences – as eventually, the accumulated depreciation and capital allowances claimed will equal one another.
⁴ Super-deduction capital allowances – From 1 April 2021 until 31 March 2023, UK companies investing in qualifying new plant and machinery assets are able to claim a 130% super-deduction capital allowance on qualifying plant assets and a 50% first-year allowance for qualifying special rate assets. For qualifying new plant and machinery assets, the top 30% slice of the super-deduction allowance (i.e., the portion which exceeds the actual purchase cost of the qualifying asset) creates a permanent timing difference which will not be resolved by accumulated depreciation and capital allowances claimed equalling one another over the asset’s life (as explained in footnote 3). The tax saving which arises as a result of the 30% permanent timing difference is therefore presented separately in the numerical tax reconciliation.
