1. for more information visit us at www.hempsons.co.uk Funding Advice Workers Network Charity Trading 23 November 2010 Catherine Rustomji Head of Third Sector North, Hempsons

2. Legal Considerations What is trading? Options to consider Exemptions available Use of trading subsidiaries

3. Trading What is it? Why does it matter?

4. Tax Exemptions Primary purpose trading Beneficiaries Small trading - Annual turnover limit - Reasonable expectation - Profits used solely for purposes of the charity

5. Small Trading – Annual Turnover Limit Total Gross income of charity Maximum permitted sales turnover Under £20,000£5,000 £20,000 to £200,000£25% of total gross income Over £200,000£50,000

6. Consequences of Trading Loss of charitable status Tax liability Possible breach of trust & personal liability

7. Trading Subsidiary Wholly owned company Tax Gift Aid Governance & Funding

8. Governance Directors Trustees Skills-mix Payment Focus

9. Funding Start up – no assets, no funding Loan Arms-length Motivation Operating capital Isolating risk

10. Catherine Rustomji c.rustomji@hempsons.co.uk 0191 230 0669