Advantages of a separate trading subsidiary Can protect the charity from tax liability Clarifies objectives for each part of organisation Limited liability status for

Many charities provide a service in return for a fee and this may amount to trading. This guide explains when trading is permitted within

If your trading subsidiary has made losses since the previous year end you are required by the Companies Act to take extra steps before

We published this guide to help you with models for collaborative working to deliver services and share back office functions . This guide covers

The common way for charities to deal with trading which does not fall within their objects is to channel the income and expenditure relating

If the activities you are planning do not fall within the exemptions and the activities are not fulfilling the primary purpose of the charity,

Primary purpose trading is trade carried out by a charity in the course of carrying out its main objects and is exempt from income

Trading is the exchange of goods or services for a fee. For tax, the law does not specifically define trading, but case law has

There are three corporation tax reliefs that are likely to be of interest to relevant arts charities: Theatrical productions tax relief Orchestral concerts tax

Arts organisations often seek business sponsorship, for example, to sponsor a specific theatre production or gallery exhibition; to sponsor a new building or wing;

Many arts organisations use patron, friends’ or supporter schemes to obtain financial support. Supporter schemes are often structured as different packages (e.g. “gold”, “silver”,

Under this scheme museums and galleries can claim a refund for VAT incurred in providing free rights of admission. Organisations must apply to join

Gift Aid rules do not allow Gift Aid to be claimed on donated goods, only on monetary donations, which are grossed up by 25%.

Charities are entitled to mandatory rates relief of 80% of any business rates payable but it is only available when the charity is the

As the trading company is a separate legal entity it must register for VAT if its taxable supplies exceed the VAT registration threshold. Any

Charities only retain tax relief if their income is spent on their charitable purposes and tax exemptions are not available for non-charitable expenditure. Non-charitable

The Gift Aid distribution of profits from a trading subsidiary to the parent charity can only be made from distributable profits. This means that