Commentary

B5.826 Charity exemption for profits of small-scale trades

Business tax
Business tax | Commentary

B5.826 Charity exemption for profits of small-scale trades

Business tax | Commentary

B5.826 Charity exemption for profits of small-scale trades

There is a statutory exemption for the profits of small trading carried on by a charity that are not otherwise exempt, provided the profits are applied solely for the purposes of the charity1. In practice, this exemption means that a charity need not establish a wholly-owned trading company to conduct its trading activities where the profits are expected to be relatively small.

This exemption applies to the profits of all trading activities of a charity which are not otherwise exempt, provided that the charity's gross income for tax years 2019/20 onwards (accounting periods beginning on or after 1 April 2019 for corporation

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