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HMRC internal manual

Business Income Manual

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HM Revenue & Customs
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Meaning of trade: mutual trading and members clubs: contents

Mutual trading is an important concept because a mutual trader is not liable to tax on any profits arising from their mutual trade. This is as a result of the principle that ‘a person cannot trade with themselves’. This section of the guidance discusses the essential requirements for a trade to be mutual and the case law from which those requirements are derived. The section also discusses a number of matters under the broad heading of mutual trading that are not mutual trading as such but which frequently involve a mutual association, including the treatment of members’ clubs and certain co-operatives and associations.

A full list of the contents of the guidance on mutual trading is shown below. The guidance is subdivided into sections, the opening page of each section being in bold in the list below. Please click on the page number alongside to go direct to each section.

Overview
  1. BIM24001
    Overview
Layout of guidance
  1. BIM24005
    Layout of guidance
Income derived solely from members’ contributions and subscriptions
  1. BIM24010
    Income derived solely from members’ contributions and subscriptions
Introduction: basic considerations
  1. BIM24015
    Introduction: basic considerations: contents
  2. BIM24020
    Introduction: characteristics
  3. BIM24025
    Introduction: origins of the concept
  4. BIM24027
    Introduction: early attempt at taxing surplus
  5. BIM24030
    Introduction: founding principles
  6. BIM24035
    Introduction: two early mutual insurance cases
  7. BIM24040
    Introduction: further early mutual insurance cases
  8. BIM24045
    Introduction: essential that the activity is a trade
Essential requirements
  1. BIM24100
    Essential requirements: contents
  2. BIM24105
    Essential requirements: contributors to and participators in a surplus must be identical
  3. BIM24110
    Essential requirements: surplus must go back to contributors
  4. BIM24115
    Essential requirements: return of surplus contributions
  5. BIM24120
    Essential requirements: members must control the common fund
Non-mutual insurance trading activities
  1. BIM24150
    Non-mutual insurance trading activities: contents
  2. BIM24155
    Non-mutual insurance trading activities: corporation water works
  3. BIM24160
    Non-mutual insurance trading activities: corn trading association
Members’ clubs: layout of guidance
  1. BIM24200
    Members’ clubs: layout of guidance: contents
  2. BIM24205
    Members' clubs: introduction
  3. BIM24210
    Members’ clubs: distinction between proprietary and members’ clubs
  4. BIM24215
    Members' clubs: Tax Bulletin article
  5. BIM24220
    Members' clubs: classes of club membership
  6. BIM24225
    Members’ clubs: temporary membership
  7. BIM24230
    Members’ clubs: Tax Bulletin article on temporary membership
  8. BIM24235
    Members’ clubs: voting rights
  9. BIM24240
    Members' clubs: different forms of club
  10. BIM24245
    Members' clubs: incorporated as industrial & provident societies
  11. BIM24250
    Members' clubs: incorporated as limited company
  12. BIM24255
    Members' clubs: incorporated as limited company: conditions to be satisfied for members’ club treatment
  13. BIM24260
    Members' clubs: incorporated as limited company: shareholder inequality
  14. BIM24300
    Members' clubs: guidance for customers
  15. BIM24305
    Members' clubs: interest paid or received
  16. BIM24315
    Members' clubs: commission income
  17. BIM24320
    Members' clubs: community associations
Community amateur sports clubs
  1. BIM24325
    Community amateur sports: contents
  2. BIM24330
    Community amateur sports clubs: relief available on a claim
  3. BIM24335
    Community amateur sports clubs: conditions for registration
Cricket clubs
  1. BIM24345
    Cricket clubs
Golf clubs: introduction
  1. BIM24350
    Golf clubs: introduction
Golf clubs: computation of profit
  1. BIM24360
    Golf clubs: computation of profit
Rugby clubs: introduction
  1. BIM24365
    Rugby clubs: introduction
Rugby clubs: Rugby Football Union (RFU) booklet
  1. BIM24370
    Rugby clubs: Rugby Football Union (RFU) booklet
Incorporation
  1. BIM24400
    Incorporation: contents
  2. BIM24405
    Incorporation: difficulties associated with having shareholders
  3. BIM24410
    Incorporation: a company trading only with its members may be non-mutual
Allowable expenditure
  1. BIM24450
    Allowable expenditure: contents
  2. BIM24455
    Allowable expenditure: trades that are partly non-mutual
  3. BIM24460
    Allowable expenditure: apportionment of mixed expenditure
  4. BIM24465
    Allowable expenditure: judicial guidance on apportionment
  5. BIM24470
    Allowable expenditure: members golf clubs: is intention relevant?
  6. BIM24475
    Allowable expenditure: the ‘Peterhead’ principle
Allocation of income: introduction and layout of guidance
  1. BIM24480
    Allocation of income: introduction and layout of guidance: contents
  2. BIM24485
    Allocation of income: nature of activities
  3. BIM24490
    Allocation of income: income from contributors
  4. BIM24495
    Allocation of income: income from non-contributors
  5. BIM24500
    Allocation of income: mixed income
  6. BIM24505
    Allocation of income: sundry income
Distributions: introduction and layout of guidance
  1. BIM24550
    Distributions: introduction and layout of guidance: contents
  2. BIM24555
    Distributions: the basic approach
  3. BIM24560
    Distributions: dividends from a co-operative etc society
  4. BIM24565
    Distributions: S1070 Corporation Tax Act 2010
  5. BIM24600
    Distributions: on winding-up
  6. BIM24605
    Distributions on winding-up: taxable on first principles or statute
  7. BIM24615
    Distributions on winding-up: statute: what is taxed?
Mutual associations: specific activities: introduction
  1. BIM24650
    Mutual associations: specific activities: introduction: contents
  2. BIM24655
    Mutual associations: specific activities: NHS doctors' co-operatives
  3. BIM24660
    Mutual associations: specific activities: NHS doctors' co-operatives: essential pre-requisite
  4. BIM24665
    Mutual associations: specific activities: NHS doctors' co-operatives: essential pre-requisite: does the trade meet the criteria?
  5. BIM24670
    Mutual associations: specific activities: NHS doctors’ co-operatives: varieties
  6. BIM24675
    Mutual associations: specific activities: NHS doctors’ co-operatives: National Association of GP co-operatives
  7. BIM24680
    Mutual associations: specific activities: mutual health insurers: introduction and layout of guidance
  8. BIM24685
    Mutual associations: specific activities: mutual health insurers: background
  9. BIM24690
    Mutual associations: specific activities: mutual health insurers: two interrelated questions
  10. BIM24695
    Mutual associations: specific activities: mutual health insurers: are they trading?
  11. BIM24700
    Mutual associations: specific activities: mutual health insurers: is the trade mutual?
  12. BIM24705
    Mutual associations: specific activities: agricultural co-operatives: introduction and layout of guidance
  13. BIM24710
    Mutual associations: specific activities: agricultural co-operatives: background
  14. BIM24715
    Mutual associations: specific activities: agricultural co-operatives: model constitution
  15. BIM24720
    Mutual associations: specific activities: agricultural co-operatives: three points to watch
  16. BIM24725
    Mutual associations: specific activities: agricultural co-operatives: financing
  17. BIM24730
    Mutual associations: specific activities: agricultural co-operatives: taxation of
  18. BIM24735
    Mutual associations: specific activities: agricultural co-operatives: not conducting a mutual trade
  19. BIM24740
    Mutual associations: specific activities: agricultural co-operatives: members taxation
  20. BIM24745
    Mutual associations: specific activities: agricultural co-operatives: futures dealing
  21. BIM24750
    Mutual associations: specific activities: Chambers of Commerce: introduction
  22. BIM24755
    Mutual associations: specific activities: Chambers of Commerce: trading?
  23. BIM24760
    Mutual associations: specific activities: Chambers of Commerce: a mutual trade?
  24. BIM24765
    Mutual associations: specific activities: Hunt point to point meetings: introduction and layout of guidance
  25. BIM24775
    Mutual associations: specific activities: Hunt point-to-point meetings: trading?
  26. BIM24780
    Mutual associations: specific activities: Hunt point-to-point meetings: dealings with members
  27. BIM24782
    Mutual associations: specific activities: property management companies
  28. BIM24784
    Mutual associations: specific activities: bulk buying groups: introduction
  29. BIM24786
    Mutual associations: specific activities: bulk buying groups: basic principles
  30. BIM24788
    Mutual associations: specific activities: bulk buying groups: two relationships
  31. BIM24792
    Mutual associations: specific activities: voluntary organisations & charities: fund-raising events: introduction and layout of guidance
  32. BIM24794
    Mutual associations: specific activities: voluntary organisations & charities: tax exemption
  33. BIM24795
    Mutual associations: specific activities: voluntary organisations & charities: conditions for exemption
  34. BIM24796
    Mutual associations: specific activities: voluntary organisations & charities: donations etc. not chargeable
  35. BIM24797
    Mutual associations: specific activities: voluntary organisations & charities: reference to Specialist PT Charities
  36. BIM24800
    Mutual associations: specific activities: trade protection associations: introduction
  37. BIM24805
    Mutual associations: specific activities: trade protection associations: HMRC arrangement
  38. BIM24810
    Mutual associations: specific activities: trade protection associations: procedural points when adopting HMRC arrangement
  39. BIM24815
    Mutual associations: specific activities: trade protection associations: benefits to members of adopting HMRC arrangement
  40. BIM24820
    Mutual associations: specific activities: trade protection associations: text of HMRC arrangement
  41. BIM24850
    Mutual associations: specific activities: marketing boards
Deductibility of payment made by contributor to a mutual trader
  1. BIM24950
    Deductibility of payment made by contributor to a mutual trader
Tax cases referred to in guidance
  1. BIM24995
    Tax cases referred to in guidance