Non-exempt income

Prior to the rewrite of corporate tax legislation in 2009, miscellaneous income not specifically exempted was within the scope of corporation tax. Such income was referred to by a generic title ‘Schedule D VI’.

There is now a specific charging provision for most of the categories of income to which it may be relevant (and for the most part these are of little relevance to charities). However, charities need to bear in mind that any profit which is not specifically exempt from corporation tax is potentially taxable. In particular, charities need to be aware of the possibility that they may be taxed on any receipts, even on a one-off basis, if they are not capital receipts and within the scope of the capital gains exemption.

One of the most common forms of such income for the charitable sector is underwriting commission. This will give rise to a tax charge unless it is within the £50,000 maximum limit for small-scale trading activities.

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