Corporation Tax Act 2010 section 480

Exemption for profits of small-scale trades

Section 480 provides an exemption from corporation tax for trading profits and post-cessation receipts of charitable companies where the trade is small-scale, provided the income is applied solely to the charity's purposes.

• Trading profits and post-cessation receipts of a charitable company's small-scale trade can be excluded from total profits for corporation tax purposes, but only if a claim is made.
• The exemption does not apply to income that is already exempt under another provision — for example, profits from a charity's primary purpose trade are exempt under section 478 and would not need this relief.
• Two conditions must be met: Condition A requires that the income arises in an accounting period where the trading and miscellaneous income threshold in section 482 is satisfied; Condition B requires that the profits or receipts are applied exclusively to the charitable company's purposes.
• Post-cessation receipts — amounts received after a trade has ceased — are also covered by this exemption, provided they are received in an accounting period that meets the section 482 threshold and are applied to charitable purposes only.