We are currently an unincorporated association which raises funds to assist competing athletes to travel abroad for competitions etc from their club. We are run by parents of the competing athletes all voluntarily, no one is paid for their time. We are not currently registered as a charity, with either the charities commission or HMRC, though I believe we could be. We may hit £5000 this year in income.
At Christmas we made a DVD of their Christmas Display which we then sold to the parents of the club. We made a profit on these sales, which is the fundraising part of the sale, which will go back into the association to pay for future competitions. We paid a company to duplicate the DVD's, but did all the editing ourselves.
Would these DVD's count as trading sales, and will we have to pay corp tax on them? If we were registered as a charity with HMRC, would we have to still pay tax on these sales, as they are purely for fundraising purposes.
Similarly, we are having a Spring Ball later on in the year. We are intending to sell tickets for £25 a head, and all profits (prob £10 per head after food taken into account) to go to the fundraising association. Where would we also stand on the profit from these tickets?
Thanks
Replies (2)
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When you say...
... "We are not currently registered as a charity, with either the charities commission or HMRC, though I believe we could be." On what do you base your belief?
Whilst I accept that the purposes of your association are for the advancement of sport, they don't seem to be for the public benefit, they seem to me to be entirely for the collective benefit of your children. Are you sure you're a charity? You don't seem to have taken any steps to confirm it.
Your fund-raising activities do seem to be trading in nature, although it's possible that the DVD sales might be regarded as mutual trading, which would not then be taxable.
Is there just one club involved? Is the club a Community Amateur Sports Club (which is treated similarly to a charity)? Are you carrying out these activities on the club's behalf?
This might be better organised differently. You could do with professional advice though, form someone who has all the facts. Is there noone associated with the club that has the relevant experience?