Charitable company

19 September 2007

Issue: 4126 / Categories: Forum & Feedback

Status of a second-hand shop set up and run by hospice within its premises

A local hospice for which we prepare accounts has been offered the use of a shop that was recently vacated by a local business on which there remain a couple of years of the lease left to run. The business has not been able to assign the lease and is happy to pay the rent for the remaining period. The hospice is planning on running a second-hand shop from the premises. My question is whether it is necessary (or desirable) that this should be via a separate company and advice is welcome.

Query T17 079 — Jude.

Reply by Hodgy:

The first question is whether this shop will be a trading venture or not. In this respect the sale of donated goods by a charity is not treated as a trade but as the realisation of a gift. Therefore if the shop is only going to sell donated...

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