CIC Regulator considers raising dividend cap

Finance | 25 Feb 2009

The Community Interest Company dividend cap is to be reviewed by the CIC Regulator as part of a wider assessment of the legal form.

The limit on shareholder dividends of 35 per cent of the organisation’s profits and five per cent above the Bank of England base rate is believed by many to discourage investors.

The review will include a public consultation, and will take place over 12 weeks this Spring and Summer, with the results analysed in the Autumn.

CIC regulator Sara Burgess (pictured) said she was looking for a firmer body of evidence on which to base any decision.

"There has been talk all over about whether there are barriers and limitations as a result of the cap on distributions. I hear about CICs that have gone down that road and it has worked well and others where it hasn't.

"I'm picking up extremes from both sides, but it's anecdotal and I want formal evidence."

The consultation is currently being prepared and will appear on the CIC Regulator website.

Who's Who: Gareth Jones

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