Trading is probably one of the most contentious tax issues that charities have to grapple with, and it is not simply an issue with tax implications, because the Charity Commission regards it as one of the main problem areas that they encounter in their programme of monitoring the activities of charities.
Many charities set up a non-charitable company through which to carry out trading activities (e.g. running lotteries, selling Christmas cards, organising auctions, fun-runs etc). A non-charitable company has to pay corporation tax on its profits, but this negates the tax-advantaged status that charities have, so charities which have set up such a company try to use the Gift Aid exemption to move profit from the company and into the charity free of tax; Gift aid is the scheme which allows you to make a donation to a charity and the charity to claim back the tax that you have paid on the donation.
During this webinar Richard Quenby will examine what the rules are in relation to trading and gift aid and will offer guidance on how to ensure that you act in a lawful manner.
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