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trading profit or not?

trading profit or not?

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3 individuals put on a comedy show specifically to raise money for an overseas charity - there is no profit for the individuals.

2 of the individuals are H&W both self-employed H as a VAT registered comedian the 3rd a unconnected

May we treat this one off joint venture as not in the nature of trade with a view to profit and hence not taxable?

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By Accountant A
26th Jun 2019 12:20

I would say it depends on the nature of the agreements in place. Are they earning money which they then donate or are they providing services (to ?) free of charge?

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By nick farrow
26th Jun 2019 12:28

the Venue collected the cash from the public then deducted its costs off the top and sent the balance to the wife who in turn sent the money to the charity. There were no explicit contracts for services.

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By Vile Nortin Naipaan
26th Jun 2019 12:49

It appears to be an unincorporated association, and the income would seem to be liable to corporation tax, less the amount of qualifying charitable donations in the accounting period.

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By nick farrow
26th Jun 2019 13:10

thanks Portia - I am struggling to ascertain whether a New Zealand charity would qualify - I fear not as not based in the UK, EU, Iceland, Liechtenstein or Norway

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Replying to nick farrow:
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By Accountant A
26th Jun 2019 14:44

nick farrow wrote:

thanks Portia - I am struggling to ascertain whether a New Zealand charity would qualify - I fear not as not based in the UK, EU, Iceland, Liechtenstein or Norway

Correct.

"Meaning of ‘charity’ and ‘charitable purposes’

The definition of the term ‘charity’ depends on the provision under consideration and the tax year/accounting period. The definition of charity was revised by Sch6 Finance Act 2010 (FA 2010), however the definition was phased in over time.

FA 2010 definition of charity

Under Sch 6 Para 1 FA 2010 a charity is a body of persons or trust that:

is established for ‘charitable purposes’ only (see below)
meets the jurisdiction condition (i.e. is subject to the jurisdiction of a relevant UK court or the courts of a relevant territory)

meets the registration condition (i.e. has complied with any requirement under the applicable law to be registered), and

meets the management condition (i.e. the managers are fit and proper persons).

This definition of charity allows charities of relevant territories to qualify as charities for the purposes of UK legislation (provided the conditions above are met). Relevant territories are those in EU Member States, Iceland and Norway"

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By Accountant A
26th Jun 2019 15:09

"Meaning of ‘charity’ and ‘charitable purposes’

The definition of the term ‘charity’ depends on the provision under consideration and the tax year/accounting period. The definition of charity was revised by Sch6 Finance Act 2010 (FA 2010), however the definition was phased in over time.

FA 2010 definition of charity

Under Sch 6 Para 1 FA 2010 a charity is a body of persons or trust that:

is established for ‘charitable purposes’ only (see below)
meets the jurisdiction condition (i.e. is subject to the jurisdiction of a relevant UK court or the courts of a relevant territory)

meets the registration condition (i.e. has complied with any requirement under the applicable law to be registered), and

meets the management condition (i.e. the managers are fit and proper persons).

This definition of charity allows charities of relevant territories to qualify as charities for the purposes of UK legislation (provided the conditions above are met). Relevant territories are those in EU Member States, Iceland and Norway"

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By nick farrow
26th Jun 2019 15:18

thx what a shame

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