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<p>There is no restriction on the level of charitable trading a charity may carry
out, and any profits are exempt from tax so long as the profits are used for wholly
charitable purposes. When charities carry out non-charitable trading there is a corporation
tax exemption so long as the trading receipts are no more than £50,000 a year and
represent no more than 25% of the charity’s incoming resources.</p><p> </p><p>Charities
that wish to carry out non-charitable trading above these limits can set up and trade
through a subsidiary trading company, which protects the charity from the possibility
of trading losses. The subsidiary can then use corporate Gift Aid to pass any profits
back to the parent charity without incurring a corporation tax charge.</p><p> </p><p>There
is a similar exemption from tax on trading income for Community Amateur Sports Clubs,
which is currently set at £30,000. The Government has announced this threshold will
be raised to £50,000, to align with the charity small -scale trading exemption.</p><p>
</p><p> </p><p> </p><p> </p><p> </p><p>The Government has no further plans to raise
these thresholds which allow charities to undertake small scale non-charitable trading
without the administrative burden of setting up a trading subsidiary. However, as
with all reliefs and exemptions we continue to keep the exemption for small-scale
trading under review.</p><p> </p><p>Unincorporated associations are taxed as companies
and have no specific corporation tax exemptions. In the same way as other companies,
they are chargeable to corporation tax and are eligible for the same reliefs.</p><p>
</p><p>The only exception to this rule concerns clubs and unincorporated organisations
with very small tax liabilities, which are run exclusively for the benefit of their
members and whose annual Corporation Tax liability is not expected to exceed £100.
In this case, HMRC will treat the organisation as dormant.</p><p> </p><p>With regards
to the representations received on these matters, Treasury Ministers and officials
receive and consider a wide variety of representations from organisations in the public
and private sectors as part of the process of policy development and delivery.</p><p>
</p><p>The Treasury publishes a list of ministerial meetings with external organisations.
This is available online at:</p><p><a href="https://www.gov.uk/government/collections/hmt-ministers-meetings-hospitality-gifts-and-overseas-travel"
target="_blank">https://www.gov.uk/government/collections/hmt-ministers-meetings-hospitality-gifts-and-overseas-travel</a></p>
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