Primary-purpose trading

Examples of primary-purpose trading are:

  • provision of educational services by a charitable school or college in return for course fees
  • sale of goods manufactured by disabled people who are beneficiaries of a charity for the disabled
  • a charitable art gallery or museum holding an art exhibition in return for admission fees
  • a residential care charity providing residential accommodation in return for payment
  • sale of tickets for a theatrical production staged by a theatre charity and
  • sale of certain educational goods by a charitable art gallery or museum.

It is conceivable that HMRC will seek to charge tax on a trading activity which, while it might be considered to be a charitable activity, is actually undertaken by a charity that does not have the power to conduct such activities.

Ancillary primary-purpose activities are those which are so closely aligned to the main trade that it is accepted that they are themselves of a primary purpose: for example, the sale of food and drink in a restaurant or bar by a theatre charity to members of the audience.

For more information, see HMRC’s guidance on charities and trading.

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