Charity Information

Useful Information For Charities

Tax Relief - Charities

Many charities trade, either as a fundamental part of their charitable activities or to raise funds. The tax implications of trading are different for direct taxes (Income Tax and Corporation Tax) and VAT.

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Charities & Trading

Your charity will not pay tax on profits it makes from trade if: you’re making money to help your charity’s aims and objectives, known as ‘primary purpose trading’.

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VAT & Charities

Any business including a charity that makes taxable sales in excess of a set figure (which is known as the Vat Registration threshold) must register for VAT. Click on the link below to find about how VAT affects charities and all matters of how Vat affects charities.

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Subsidiary Trading Company

Charities may set up as a subsidiary trading company to trade on their behalf. They may do this as their charity makes profits on trading that's not linked to its primary purpose or wants to have a seperate organization to carry out all its trading activities.

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Tax on Fundraising & Lottery

Your charity won't have to pay tax on profits it makes from lotteries or fundraising events, e.g. jumble sales. This is as long as: all your profits go to your charity's primary purpose.

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Faith Based Charities

Faith-based charities make up approximately 20% of charities registered with the commission. Almost half of all overseas-aid and human-rights charities in England and Wales are faith-based.

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Recent charity register statistics: Charity Commission - 31st December 2016
*Annual income bracket*	*Number of charities*	%	*Annual income £ bn*	%
£0 to £10,000	65,842	39.4	0.218	0.3
£10,001 to £100,000	56,853	34	2.007	2.7
£100,001 to £500,000	21,956	13.1	4.826	6.6
£500,001 to £5,000,000	8,972	5.4	13.409	18.4
£5,000,000 plus	2,201	1.3	52.647	72
SUB-TOTAL	155,824	93.2	73.107	100
Not yet known	11,285	6.8	0	0
TOTAL	167,109	100	73.107	100