Zero Tax, Millions in Surplus: The £39m Question Facing North East Housing Giants..
How Charitable Status Is Wiping Out Millions in Corporation Tax Liabilities at Two of the Regions Largest Housing Providers...
19th Sep 2026
The financial Accounts of two of the regions largest housing associations has revealed almost £40 million pounds of UK Corporation Tax has been avoided from both Believe Housing and Thirteen Housing Group over the last four years, This is if their surpluses had been taxed on broadly the same basis as ordinary 'real world' commercial businesses.
As households across Teesside and County Durham prepare for what the Chancellor has described as a challenging autumn Budget, an examination of the accounts of two of the region's biggest housing associations has revealed the extraordinary value of the Corporation Tax exemptions being handed out to so called 'charitable housing providers', where analysis by the Teesside & Durham Post has found that approximately £39 million pounds in theoretical Corporation Tax could have arisen from the surpluses recorded by both County Durham Based Believe Housing and Teesside Landlords Thirteen Housing Group over just four financial years, that's if those surpluses had instead been taxable broadly on the basis applying to ordinary commercial businesses.
The exemptions being claimed by both the two regional Landlords are lawful and form part of longstanding UK tax policy towards charities.
But the figures said to be exposing a striking contrast at a time when the Treasury's under increasing pressure to balance Britain's books with households again facing the prospect that the Government could be set to seek additional revenue from already strained households in its October Budget. While Chancellor John Healey has declined to pre-empt decisions on taxation. Reuters has reported pressure on the Treasury from higher borrowing costs and spending commitments, although no specific additional household tax rises have yet been announced.
The numbers are written into the accounts..
The clearest example comes from Coounty Durham Based Believe Housing's newly published accounts for the year ending March 2026, where believe recorded a £16.241 million surplus before taxation.
Its own financial statements then calculate that tax on that profit at the standard UK Corporation Tax rate of 25% would have amounted to £4.060 million had it not claimed Charitable Status, leaving the organisation's current Corporation Tax charge at £nil.
Believe explains why:
its income and gains are applied for charitable purposes and it therefore expects to fall within the tax exemptions available to charitable entities.
The previous year tells much the same story, where Believe reported a £14.940 million pre-tax surplus for 2024/25. Its accounts calculated tax at the standard 25% rate at £3.735 million, before the charitable treatment reduced the current Corporation Tax charge to zero.
Thirteen's figure is even larger....
The same pattern appears in the accounts of Middlesbrough-based Thirteen Housing Group, one of the North East's largest so called 'social landlords'.
For 2024/25, Thirteen reported a group surplus before tax of £34.140 million.
Its financial statements calculated a theoretical Corporation Tax charge of £8.535 million at the standard 25% rate.
The accounts then recorded £8.665 million relating to charitable activities not taxable, together with other adjustments, leaving no Corporation Tax charge on the association's charitable activities.
That means that just in the 2024/25 financial year alone, the two organisations' would have owed the UK Treasury somewhere in the region of around £12.270m in Corporation Tax, with HMRC confirming that the main Corporation Tax rate for profits above £250,000 is currently 25%.
Around £39 million has been lost in just over four years
Extending the comparison over four financial years produces an even more striking result, with calculations using the tax reconciliations contained in the published accounts, together with Thirteen's latest reported 2025/26 surplus, producing the following approximate figures:
Financial year | Believe Housing | Thirteen | Combined theoretical tax |
2022/23 | £1.251m | £4.636m | £5.887m |
2023/24 | £2.341m | £7.110m | £9.451m |
2024/25 | £3.735m | £8.535m | £12.270m |
2025/26 | £4.060m | ~£7.425m* | ~£11.485m |
Total | £11.387m | ~£27.706m | ~£39.093m |
*Thirteen's £7.425 million figure for 2025/26 is an estimate obtained by applying 25% to its reported £29.7 million net surplus. Unlike the 2024/25 figure, it is not being presented as an audited tax-reconciliation figure.
Thirteen's current investor information confirms a £29.7 million net surplus for 2025/26.
It means that, on this counterfactual calculation, the Treasury could theoretically have received around £39.1 million over four years had those surpluses been fully taxable at ordinary commercial rates and the charitable exemptions not applied.
It isn't simply because they aren't 'Ltd companies'
The revelation comes as both Believe & Thirteen Housing Group are facing calls to be stripped of their so called Charitable Status in the wake of claims the modela being used to systamatically dodge Corporation Tax Liabilities were in fact never meant to be used for businesses of such large scales.
HMRC guidance also makes clear that being a registered society does not, by itself, exempt an organisation from Corporation Tax. Registered societies broadly fall under the same tax rules as companies, but may qualify for exemptions where, for example, they are recognised as charities, although the charitable activities of both Believe & Thirteen Housing Group have, for many years remained highly disputed.
HMRC says charities can claim exemptions from tax on most income and capital gains where the money is applied for charitable purposes.
Believe describes itself as a charitable Co-operative and Community Benefit Society. Its 2026 accounts say it owns or manages 18,413 homes and recorded turnover of £91 million.
Thirteen is also a Community Benefit Society, and its own tax strategy says its parent organisation is recognised by HMRC as a charity for tax purposes, however there's little.... if any evidence to establish the basis that either firm undertakes anything in any relation to any form of recognised charitable activities and does not technically recieve funding from sources in the form of 'donations'...
So Where's The Money Going ?
Unlike an ordinary commercial property company, these organisations don't have conventional shareholders receiving dividends, but they do have significantly 'complex' management structures that command significant pay packets.
Thirteen explicitly says that its profits and gains are used for the benefit of the group and reinvested in existing homes, services and new housing. It says it owns and manages more than 36,000 homes and does not engage in aggressive tax planning or tax avoidance schemes.
Thiteen reported investing £68.2 million in new affordable homes during 2025/26 and expects to spend £74.3 million on its existing housing stock during the current financial year.
Believe can point to similar investment.
During 2024/25 it reported spending £31.4 million improving existing homes, £27.4 million on repairs and maintenance and £25 million acquiring and developing new homes.
Its latest accounts say it delivered another 194 homes during 2025/26, as well as calculating £13.1 million of social value through community investment, employment support and energy-efficiency work.
A £39m public-policy trade-off
Nevertheless, the scale of the exemption becomes difficult to ignore when placed alongside the pressure on the country's public finances, with the Treasury confirming that the next Budget will take place on the 28th of October 2026, with the Government promising fiscal discipline.
Current reporting suggests the Chancellor is likley to be facing some significantly difficult choices in the weeks ahead because of borrowing costs and spending pressures, although decisions on individual taxes have not yet been announced.
Against that backdrop, the accounts of Believe and Thirteen demonstrate the value of one particular part of the tax system seemingly if the government made changes to the taxation system that many feel should be brought in to ensure noth Thirteen & Believe Housing pay thier fair share.
Over four years, the theoretical Corporation Tax revenue thats been lost to the Treasury from just two local companies approaches £40 million pounds.
Removing or restricting charitable tax treatment for large housing associations could produce additional Treasury revenue, but both orgainsations argue that doing so could also leave those organisations with less money for repairs, new affordable housing and other services unless that loss were replaced through rents, borrowing or public subsidy.
£39.1 MILLION
However, At a time when ministers are examining the nation's tax and spending position, the question raised by those numbers is likely to be whether Britain's current balance between taxing large social landlords and allowing them to retain their surpluses for so called charitable housing purposes which locals seemingly fail to be seeing remains the balance Parliament intended when they originally brought in the excemptions that many now feel are allowing two regional landlords to become more dominant & leaving smaller Independent Housing associations struggling.
