When Should An Academy Trust Establish A Trading Subsidiary?

What circumstances mean an academy trust may need to set up a subsidiary company to carry out trading activity, in order to comply with charity law?

Originally published 4 July 2018, updated November 2023

Academy trusts may decide to pursue alternative strategies to generate extra income, as highlighted inthis earlier Wrigleys article. Such activities may be classed as trading, particularly where services are provided alongside school facilities, such as cleaning or catering.Where this is the case, an academy trust may need to set up a trading subsidiary in order to undertake them.

What trading can an academy trust do itself?

The general rule is that an academy trust can only carry out trading activity which furthers its charitable objects, or which is ancillary to furthering those objects.