Trading issues made simple

1
Trading issues made simple

• Charity Accountants Conference
• Noelia Serrano
• Annabel Elliott
• September 2009

2
Agenda

• Income trading or not
• If trading definition and types
• Exemptions
• Trading subsidiaries

3
Non-trading income

• Voluntary income/grants
• Sale of donated goods
• Letting out premises
• Investment income

4
Non-trading income (contd)

• Case related marketing
• Company donations
• Membership
• Lotteries

5
What is trading?

• Repetition
• Profit motive
• Mechanism for selling
• Acquisition of items for resale

6
What is trading? (contd)

• Trading within charitable objectives
• Trading undertaken mainly by the charities
  beneficiaries
• Ancillary trading
• Mixed trades

7
Further exemptions

• Small scale trading exemptions
• Fundraising activities
• Qualifying fundraising events

8
Do you need a trading subsidiary?

• Are the charities assets at risk?
• Are investments or loans involved?
• Is there a tax liability?
• Management considerations

9
Do you need a trading subsidiary?

• Advantages
• Protects charity from tax liability
• Clarifies objectives
• Limited liability
• Can undertake more activities
• VAT planning

10
Do you need a trading subsidiary?

• Disadvantages
• Added costs
• Tax knowledge needed
• Must operate at an arms length
• Management charges
• Rate relief lost

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Conclusion
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Case study

• Charity tax and trading
• Mind support

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Sayer Vincent contact details

• Noelia Serrano/Annabel Elliott
• noelia_at_sayervincent.co.uk
• annabel_at_sayervincent.co.uk
• 020 7841 6360
• Publications
• www.sayervincent.co.uk