Small trading exemption

Charities can raise money by trading that has nothing to do with their purposes — but only so much before the profits become taxable.

The exemption is banded against the charity’s total incoming resources, with a floor and a ceiling, and there is a let-out where the charity reasonably expected to stay within the limit. It is a cliff edge: exceed it and the whole profit becomes taxable, not just the excess.

Above the limit the usual route is a trading subsidiary. See trading and tax and primary purpose trading, which is exempt regardless.