A guide to third sector trading - WCVA

It’s an idea, but is it business? A guide to third sector trading
1: Getting
started
2: First steps 3: Business
planning
4: Legal and
governance
5: Funding
and
resourcing
6: Financial
controls
7: Managing
growth
8: Management
and
governance
9: Social
enterprise
10: Sources
of support
• Social enterprises often work in areas ignored or abandoned by
private business. They are commonly only marginally viable, and
yet they pay VAT on most of their purchases and corporation tax
on their meagre profits, even when these have been generated
by the efforts of volunteers.
• It seems unfair to many people that the fiscal regime is so harsh
(or complicated, if you follow the charities and trading subsidiaries
route) when government policies are encouraging increasing
numbers of voluntary organisations to consider trading. But despite
recent major overhaul in charity and company law, tax concessions
for anything that stands outside the tightly nailed down definitions
of charity are as far away as ever.
A deterrent or challenge? Some voluntary organisations will
probably be deterred from starting trading activities by the
complications or inequity of tax law. But others will, typically, see
it as yet one of many challenges in helping to meet the needs of
disadvantages communities and individuals. They should not,
though, in their bloody-minded determination to persevere, close
their eyes to the system. There are penalties for infringements such
as late payment. Businesses end up paying for misjudgements and
mistakes, and fraud can have extremely serious consequences for
individuals.
198