A student-run consultancy that invoices clients, holds other people’s money or signs contracts has outgrown the students’ union society model. This page explains how society finances work, when a limited company becomes necessary, and the three company structures to compare.
At almost every UK university, a society does not have its own bank account. Funds sit as a sub-account inside the students’ union’s own account, and the SU runs the money: deposits, reimbursements, invoices to external parties, VAT where applicable. Oxford, Cambridge, Lancaster, Essex and most other SUs we have reviewed either prohibit external accounts outright or treat opening one as a serious policy breach.
Three consequences follow:
| Limited by shares | Limited by guarantee | Community Interest Company (CIC) | |
|---|---|---|---|
| Shareholders | Yes | No (members) | Yes or no |
| Can take SEIS/EIS investment | Yes | No | Only limited-by-shares CIC |
| Profits distributed to owners | Yes, as dividends | No | Capped (dividend cap applies) |
| Asset lock | No | Via constitution | Statutory |
| Best for | A for-profit consultancy with scale plans | A not-for-profit society that invoices | Social enterprise with a clear community purpose |
| Corporation tax on surplus | Yes | Yes | Yes |
The common misconception is that “not-for-profit” means “tax-exempt”. It does not. Any trading surplus is chargeable to corporation tax regardless of the company’s constitution, unless the company is a registered charity. HMRC’s long-standing informal practice has been not to request a return where the Corporation Tax liability is under £100, but that is a practice, not a right.
HMRC treats each club and society as a separate business for VAT. The £90,000 VAT registration threshold for 2026/27 applies to the society in isolation. A paid consultancy earning £8,000 a month hits the threshold within a year. Once registered, VAT returns are quarterly and under Making Tax Digital.
Companies House expects director changes to be filed within 14 days. People with Significant Control (PSC) changes have the same deadline. A student company that elects its directors at an AGM each spring needs a filing routine that goes:
A limited company does not solve continuity on its own. The outgoing committee needs to hand over bank mandates, Xero logins, HMRC agent authority, open invoices and the deadline calendar. The spoke page on running a student-run business covers the handover in detail.
Yes, through the students’ union account, but the society itself is not a separate legal person. Larger clients usually need a limited company on the other side of the contract.
Yes, on any trading surplus. “Not-for-profit” is not the same as “tax-exempt”. Charity status is the only route to meaningful corporation tax exemption, and most student consultancies do not qualify.
In a society, the committee members who signed the contract. In a limited company, the company is liable up to its assets, and directors have specific statutory duties but limited personal exposure unless they have given a personal guarantee or acted wrongfully.
Only if structured as a company limited by shares. A limited-by-guarantee company has no share capital to issue to investors.
Official guidance: Set up a private limited company, VAT registration, running a limited company. AccTek is independent of HMRC and GOV.UK.
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Godwin Pinto ACA (ICAI) is the founder of AccTek and a member of ICPA, with 20+ years of experience in accounting and tax for contractors, startups and SMEs. Previously at PwC.
AccTek is a member firm of the Institute of Certified Practising Accountants (ICPA), and our founder is a member of the Association of International Accountants (AIA) holding an AIA Practising Certificate. Our accountants hold qualifications and accreditations from trusted professional bodies including the AIA, ICPA, AAT and ACCA.
