Charities and Trading

A UK charity will be trading if it sells goods or services to its customers. There are rules on what types of activities count as charity trading. Those rules are (as you would expect) complex, with HMRC and the Charities Commission taking an interest. The following is a general summary only. Please contact us for specific advice.

Whether the sale of goods and services by a charity is ‘trading’ depends on a number of factors, including:

  • the number and of transactions;
  • the type of the goods or services;
  • the intention of the charity in acquiring the goods to be sold;
  • whether the goods are capable of being used by the charity selling them;
  • how the goods or services are sold; and
  • whether the sale is intended to make a profit

The distinction becomes important when considering if a charity’s activities are within its declared charitable objects, and whether the activities are taxable.

Lots of types of trading are appropriate activities for charities. More information is set out below.