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Charity collection activity on a 50/50 basis

Charity provides a 'for sale' item to other charities/ worthy causes on a 50/50 basis. Net or gross

A charity provides other charities/worthy causes with a collection avenue for sale on the basis that they keep half the money collected.  Should the proceeds be shown gross, with the deduction shown as a cost, as in commission in commercial accounts, or should the money actually received be shown net?  The items are identified as collecting for the source charity.

Any advice acknowledged and appreciated.

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07th Feb 2018 14:14

Not sure what a 'collection avenue for sale' is, but you should look at the agreement between the parties, and also para 5.9 of the SoRP.

Also this doesn't sound like primary purpose trading; have you considered the tax treatment?

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to WhichTyler
07th Feb 2018 14:31

The items are a quiz sheet, produced by the charity, which is sold for £1.50 and there is a prize draw at the end for 100% correct answers or nearest if none; only about 20% of those sold are returned. The items therefore have no residual value. The scheme has, I gather, been checked for lotteries act compliance.

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to Richard Willis
07th Feb 2018 14:57

So there is a charity, and intermediary and an end customer. Does the charity sell the quiz sheet to the intermediary? Or does the intermediary sell them to the end customer on the charity's behalf? Who does the end user think is getting the money?

See also 'working with commercial partners' at 5.3 here
https://www.gov.uk/government/publications/charities-and-fundraising-cc2...

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