Increased trading threshold for charities

26 Apr 2019 Governance

As announced in last year’s autumn budget, from April 2019 the charity small trading exemption has increased to £80,000. The increase allows more charities to benefit from trading that is not related to the charity’s primary purpose without having to set up a trading subsidiary.

The allowances based on proportion of income are as follows:

Annual charity income

Maximum non-primary purpose trading

Under £32,000

£8,000

£32,000 to £320,000

25% of total income

Over £320,000

£80,000

How can you take advantage of the increase? Simply put, you can sell more goods or services that are not related to your charitable purposes – anything from selling merchandise to running a café.

Remember, primary purpose trading – selling goods or services that are directly related to what your charity is set up to do – remains free of income or corporation tax.

For more information see https://bit.ly/2DvS5F5 (for information on the small trading exemption) and https://bit.ly/1KjLQOV (for information about charity trading in general).