Charity shops

Charities running a charity shop need to consider a range of tax issues.

In terms of tax issues, charity shops benefit from exemption from corporation tax, zero rated VAT on the sale of donated goods, and business rates relief. Money raised by selling donated goods like clothes does not qualify for Gift Aid. However, by concession charities can act as the donor’s ‘agent’ to sell goods on their behalf if the owner will give the sale proceeds (minus any commission charged) to the charity as Gift Aid donation.

The Charity Retail Association also publishes a number of detailed guidance notes on the practical and administrative issues entailed in running a charity shop.

Charities may also be interested in Donated goods.