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bribery guidance says charities caught

Many charities have taken the view that the legislation applies only to enterprises trading for profit and or operating in international markets; these charities’ interpretation of the phrase “commercial organisations” used in the Act.

The statutory guidance is quite clear that any incorporated body which engages in commercial trading, regardless of the purpose for which profit is made, are caught by the provisions of the Act. Charities are explicitly referred to as being within scope.

Commercial trading has no legal definition. It is implicit in the guidance that entering into any form of contract constitutes trading, be that for the receipt of goods and services, the supply of goods and services, employment, etc..

One may argue that charities do not generate profit. Whilst literally true, charity surpluses, a profit by any other name, are not subject to tax by virtue of the exemptions granted under s505 of the Income and Corporation Taxes Act 1988. The same principle is inherent in the Bribery Act; charities generate a profit (sic surplus) they are simply not taxed on it, but it is a profit nonetheless.

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