3.42.18 Commissions received by charitable organizations or their trading subsidiaries should be set at a reasonable rate to cover the costs of operating the system. Charities may be asked by HMRC to explain how they set their commission rates. Since the intermediation agreement for the sale of goods on behalf of an individual is a commercial activity, the commissions received constitute consideration for a taxable supply and VAT must be charged at the standard rate. If the commissions calculated do not reflect the actual costs incurred as intermediaries for the sale of goods on behalf of individuals, it is not a business for VAT purposes. Under these conditions, the VAT due on the costs related to the agency agreement is not refundable by the charity or subsidiary. However, this does not apply to payments made for minor children of a donor (children under 18 years of age). Thus, a payment that qualifies to be treated as a gift when made in relation to the donor in person is accepted as a gift when it is made for his minor child. 3.37.7 If a charity separates the part of the membership fee that grants only the fundamental rights of membership and does not cover more than the basic administrative costs of the charity from a party relating to the provision of services or institutions, the affiliation element may be a donation. For example, a sports charity that collects a basic membership with additional, variable, training or play fees according to the member`s standards might consider the basic membership as a gift. Additional training or play costs could not be treated as gifts. A charity that collects a default membership fee covering membership and participation would not be able to treat part of the subscription as a gift if participation in the activities involves the personal use of services or facilities. 3.39.10 This option applies when a member of the public can acquire an entrance fee, but instead opts for a gift that is at least 10% higher than the entrance fee, and in return for that donation, the charity grants the corresponding entry to see charity goods. .