socialmedian: Q&A: Charities and trading

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Q&A: Charities and trading

Source: guardian.co.uk Society

Nov 03, 2009

Summary

In the sixth of a series of pieces giving legal advice to the charity and social enterprise sector, Erica Crump and Augustus Della-Porta, solicitors at Bates Wells and Braithwaite (www.bwbllp.com), answer questions on charities and trading.

Can charities trade?

Yes! Even though trading is a commercial activity charities both can and do trade. The sale of goods and services now brings in over half of the third sector's income. Trading activities range from the sale of goods such as Christmas cards and the operation of cafés and restaurants, to charging fees for courses or access to activities.

Are there any restrictions on charity trading?

Yes, there are lots of traps to watch out for. Charity law imposes restrictions on the nature and level of trading activity charities can carry out. Tax is also a potential problem – some types of trading will attract a tax bill. There are two main types of trading carried out by charities, which have very different charity law and tax implications. These are primary purpose trading and the imaginatively named non-primary purpos

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