Since being established as a social enterprise in 2001 we have been proud to announce when we have made a profit. One of the big problems with working as a social enterprise is that if you tell people you want to make money, they think that you are demonic and that for some reason, wanting to make money negates your social values.

BUT to the contrary you need to make a profit to stay in business. If you want to help people and develop social programmes the only way to do this and be sustainable is to be good at the business side of what you do. How many organisations do we know that are great at working with people but who struggle to balance the books.

So with this in mind we did all the right things we registered for VAT, we have paid corporation tax on any profits we have made, we run PAYE schemes and pay Income Tax and NI. In my mind just like any normal business, so it came as a bit of a surprise to hear from HMRC VAT that we did not operate as a business because we received grants. Then came the big problem, because we were not a “real” business we could not reclaim the VAT on any money we had received as grants and with the letter came with a demand to pay back £12K in back VAT for the period 2008 to 2012

I am thinking hay what’s happened to the BIG Society? Small local companies and organisations taking over the running of the country? We argued the case for 2 years but (as you can guess) in the end after nearly going out of business to find the money, we paid the “debt” back to HMRC before we got taken to court.

So we have started to ask around if anyone else is in the same position? Please let me know if you have been subjected to a similar backdated claim.