Commission updates guidance on trading

The Charity Commission has published new guidance for charities setting up trading arms or subsidiary companies to raise funds.

Trustees, trade and tax – how charities may lawfully trade, released yesterday, explains when and how charities may raise funds through commercial enterprises, and offers an explanation of the taxation of trading profits. It also examines the difference between their legal obligations and best practice.

Speaking at an open meeting for social enterprises and Community Interest Companies in London yesterday, Dame Suzi Leather, chair of the commission, said the document was written after a call from the Better Regulation Commission for clearer guidance.

"We do hear from some charities that it can seem like a minefield - particularly when trying to negotiate not only the implications under charity law, but also deal with the thresholds at which it becomes necessary to establish a subsidiary," she said.

The guidance is available online at www.charitycommission.gov.uk/publications.

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