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.