Charities and Trading Activity

Trading Activity

Trading activity is not usually the first thing that springs to mind when thinking about charities but charities are able and do engage in trading activities.

The advantages to a charity in terms of their tax obligations are numerous but trustees need to ensure that trading activities are closely allied to their charitable objectives. Where trading activities are likely to stray beyond the charity’s charitable objectives or the assets of the charity are likely to be put at significant risk, a trading subsidiary must undertake the activity.

The use of a trading subsidiary brings many benefits but is not always suitable. We would recommend taking early advice from our Charity Team who can discuss your trading activity with you and weigh up the pros and cons of setting up a subsidiary.