Autumn Budget 2018 – Charities –increase in small trading exemption

For those charities that carry out trading activities that do not form part of their primary or ancillary purpose, a small trading exemption provides them with exemption from tax on income generated within certain limits. The current limits are as follows:

Annual charity income                                    Maximum non-primary purpose trading

Under £20,000                                                        £5,000

£20,001 – £200,000                                                25% of the charity’s total annual turnover

Over £200,000                                                        £50,000

 

With effect from 1 April 2019 (companies) and 6 April 2019 (non-corporates) the limits are increased as follows:

Annual charity income                                    Maximum non-primary purpose trading

Under £32,000                                                            £8,000

£32,001 – £320,000                                                25% of income

Over £320,000                                                         £80,000

 

The increase in limits will assist charities to maintain their exempt charitable status making sure they deliver their charitable aims.