Trading & trading subsidiaries

If trading is a part of your fundraising strategy – or you’d like to explore it as an option – we can help you make your venture a success, while staying on the right side of charity law and HMRC.

Charity trading can be an excellent way to generate income, but if it’s not related to your primary purpose, you may need to think about a trading subsidiary. A trading subsidiary could also prove to be the best way to manage the risk and tax considerations if you’re branching into a new activity or partnership.

With our experience in helping charities to structure and manage their trading activity, we can take you through the options to decide on the best approach for your operations. And if you have an established trading subsidiary, we can work with you to assess if you need to review any aspect of your operations in light of the Charity Commission’s latest guidance - “Charities with a connection to a non-charity”.

How we help

We can help you structure your trading operations. We’ll look at the different activities and work out if the more commercial aspects should be carved out and run separately from the core charitable activities.

This likely involves an investment of charitable resources, so you’ll need advice on investment duties, tax implications and making sure it’s structured within charity law rules and restrictions.

We regularly set up trading subsidiaries where charities are undertaking a new activity. Perhaps you are carrying out more fundraising and letting corporate partners use your name and logo to advertise their relationship with you. A trading subsidiary can allow you to manage this income in a tax effective way – meaning more should ultimately reach your beneficiaries.

If you already have a trading subsidiary and it’s been a while since it was established, take a look at our health check. We’ll guide you through a self-assessment of your current arrangements against the Charity Commission’s checklist in its guidance for charities with a connection to a non-charity.

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