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HMRC internal manual

Banking Manual

Banking surcharge: definition of banking company: excluded entities - commodities

Commodities firms are excluded entities for the purpose of the banking surcharge. Commodities firms include exempt commodities firms and firms which only carry on relevant regulated activities for the purpose of trading in commodities or commodities derivatives.

Exempt commodities firm

Exempt commodities firms are firms that are exempted from obtaining permissions by the regulatory authority. A company is an exempt commodities firm if is an exempt IFPRU commodities firm as defined by the FCA Handbook

Commodity trading

A company not otherwise excluded as an ‘exempt IFPRU commodities firm’ is also an excluded entity if its only line of business is to carry on relevant regulated activities for the purpose of trading in commodities or commodity derivatives.

This exclusion also applies if a company carries on a second line of business, which is not deposit taking and the company’s activities in that line of business would not, on their own, result in it being both an IFPRU 730K firm and a full scope IFPRU investment firm if it only carried on this second line of business. 

HM Revenue and Customs view hedging transactions undertaken in respect of commodities trades as being undertaken for the purposes of commodity trading.