Pillar Guide · Updated July 2026
Community Interest Company (CIC): A Complete UK Guide for 2026/27
A Community Interest Company lets a social enterprise trade as a normal limited company while locking its assets and profits toward community benefit. This guide explains the community interest test, the asset lock, Corporation Tax treatment, and how a CIC compares with registered charity status.
What a CIC Is
A Community Interest Company is a limited company designed specifically for social enterprises, incorporated at Companies House like any other company but with additional legal safeguards ensuring its assets and trading profits are used for the benefit of the community it serves, rather than to maximise returns for shareholders. It can be limited by shares or by guarantee, and can trade commercially in exactly the same way as an ordinary business.
The Community Interest Test
To register, a company must submit a community interest statement to the CIC Regulator setting out how its activities will benefit the community, and the Regulator must be satisfied that a reasonable person would consider this a genuine community benefit rather than a purely private commercial or political purpose. This test is broader and more flexible than charitable purposes, allowing CICs to pursue a wide range of social, environmental or community goals.
The Asset Lock
The asset lock is the defining legal feature of a CIC: it restricts the company from transferring assets out for less than full value, other than to another asset-locked body (such as a charity or another CIC) or as a permitted distribution to shareholders, and ensures that if the CIC is ever wound up, any residual assets must pass to another asset-locked body rather than being distributed to members.
Dividends and Distributions
CICs limited by shares can pay dividends to shareholders. A statutory dividend cap applied historically, but the cap on the dividend per share was largely removed for financial years beginning on or after 1 October 2014, giving CICs more flexibility to attract share capital investment while the underlying asset lock on dissolution still protects the company's community purpose.
Corporation Tax Treatment
A CIC is taxed as an ordinary limited company for Corporation Tax purposes: it pays 19% on profits up to £50,000 (the small profits rate), 25% on profits above £250,000 (the main rate), with marginal relief tapering the effective rate in between. Unlike a registered charity, a CIC does not receive an automatic Corporation Tax exemption on its trading profits, even where those profits are reinvested into community activities, unless a specific relief applies.
CIC vs Registered Charity
A charity must exist exclusively for charitable purposes recognised in law, is regulated by the Charity Commission, and in exchange benefits from substantial tax reliefs including Gift Aid on donations, business rates relief, and Corporation Tax exemption on most charitable income, but faces stricter trustee duties and limits on political campaigning and trading. A CIC has more flexibility over its purposes and can combine commercial trading with community benefit more freely, and can pay directors and issue shares more readily than a charity, but forgoes the charitable tax reliefs and remains subject to ordinary Corporation Tax.
Annual Filings
A CIC must file the same annual accounts and confirmation statement at Companies House as any limited company, plus an additional Community Interest Company Report each year describing the activities carried out for community benefit, how stakeholders were consulted, and confirming compliance with the asset lock and any dividend or interest payments made.