The first step is to understand what counts as 'trading' so that taxes can be calculated for purposes of trading profits. This is not always clear, but the following are generally not considered to count as trading:
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the sale of goods donated to a charity
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the sale of investments
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the sale of assets that the charity uses (or has used) for charitable purposes
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the letting of land and buildings where no services are provided to the user
For further information, see the Government's guidance on Trading by charities.
In terms of activities that do count as trading, charities are generally not liable for trading profits (which would normally be payable by non-charities) in the following scenarios:
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if money is being made to help the charity's aims and objectives (known as 'primary purpose trading')
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if the level of any non-primary purpose trading falls below the charity's small trading tax exemption limit
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if the charity trades through a subsidiary trading company
Charities are not exempt from paying Value Added Tax (VAT) when trading (if their trading income is above the VAT registration threshold of £85,000), but they are eligible for certain VAT reliefs.