HMRC internal manual

Business Income Manual

BIM24000 - 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.

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