Finance News: Typical charity fails to reach maximum trading 'allowance'

The level of trading by charities is typically well below the legal limit, even thought there is pressure to raise the legal limit, according to the Association of Chartered Certified Accountants (ACCA).

Charities can trade in-house provided the revenue does not exceed £5,000 or 25 per cent of their total income. For charities with income above £200,000, trading cannot exceed £50,000 a year.

Last month, the parliamentary committee scrutinising the draft Charities Bill recommended raising the £50,000 limit, while umbrella bodies Acevo and the Charity Finance Directors' Group have called for its abolition.

But the ACCA says that charities are already neglecting the opportunity to raise more income, even before any change in the law.

"Research has shown that trading revenue as a proportion of income for the top 200 charities was less than one quarter of 1 per cent," said the association's head of taxation, Chas Roy-Chowdhury.

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