Your charity is trading if it sells goods or services to customers. There are rules on what types of activities count as trading.
Overview
Your charity will not pay tax on profits it makes from trade if:
- you are making money to help your charity’s aims and objectives, known as ‘primary purpose trading’
- your level of trade that is not primary purpose falls below the charity’s small trading tax exemption limit
- you trade through a subsidiary trading company
Your charity must pay tax on any other profits.
VAT
Your charity is not exempt from paying VAT when trading but it is eligible for some VAT reliefs.
If your charity’s trading income is above the VAT registration threshold, it must register for VAT.
