Charities: Increase in small trading tax exemption limits

As of April 2019, the upper limits at which charities can carry out non-primary purpose trading without incurring a tax liability have increased.

These limits are relevant to charities which conduct trading activities in order to raise funds, for example, by selling Christmas cards

The limits are now as follows:


Charity’s total gross annual income                                        Maximum permitted non-primary purpose trading turnover

Under £20,000                                                                                        £8,000

£20,001 – £320,000                                                                              25% of the charity’s annual turnover

More than £320,000                                                                             £80,000


It should be noted that, notwithstanding these limits, trustees might consider undertaking trading through a trading subsidiary as a means of ring-fencing the risk involved in the operation.

Liz Gifford is a solicitor specialising in charities law in the business services department at Barker Gotelee Solicitors in Ipswich.

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