A shop that sells fair-trade goods has appealed to the charity tribunal against the Charity Commission’s refusal of its application for charitable status.
Harrogate Fair Trade Shop, in North Yorkshire, which sells fairly traded items, lodged an appeal with the charity tribunal earlier this month after the commission turned down its application for charitable status.
A spokeswoman for the commission said the shop was not awarded charitable status because "trading is not in itself a charitable purpose".
She added: "To relieve those producers of fair-trade goods in poverty, suffering or distress in any part of the world by the sale of goods (in this case, through a shop) did not in our view directly relieve their poverty," she said. "Expanding the market for fair-trade goods and promoting the Fairtrade brand do not in our view further a charitable purpose. These are ancillary to the purpose."
The spokeswoman said it was on that basis that the commission decided the shop was not a charity in law.
David Seaman, treasurer of Harrogate Fair Trade Shop, said he felt that a number of the commission’s arguments for not registering the shop were incorrect. "I think the shop satisfies the conditions of being established for charitable purposes and it provides public benefit," he said.
Seaman said the principal purpose of the shop was not to make a profit and it had made donations out of its profits to charities that worked to relieve poverty. "No individual benefits from the profits of the company," he said.
The company, he said, had applied for charitable status "to give greater flexibility on Gift Aid and for tax exemptions for some profits".The commission spokeswoman said the regulator had given the trustees of the organisation advice on how they could demonstrate their charitable status – for example, by creating a new charitable trust under which the shop could covenant its profits to it for charitable purposes – but could not agree that the shop itself was charitable.