Following the publication of the Joint Scrutiny Committee’s report on the Draft Charities Bill, the groups have written to charities minister Fiona Mactaggart to urge her to cut the the “nonsensical” red tape forcing charities to set up separate trading companies. The committee recommended raising the £50,000 limit on trading income that can be raised within a charity before it must set up a subsidiary. This limit should be set following consultation, the committee suggested.

"The current limits for charity trading are patronizing, counter-productive and a hindrance to effective organisations,” says ACEVO chief executive Stephen Bubb. “For years charities have suffered the cost and inconvenience of tedious trading red-tape that serves little purpose. It’s high time we knocked this nonsensical bureaucracy on the head.”

Having consulted their members, Acevo and CFDG are recommending that the limit on trading income should be expressed as a percentage of total turnover, accompanied by a legislative duty of care. A survey of 50 chief executives and finance directors showed over 95% supporting the approach, with a similar proportion supporting a limit set at 25% of turnover.