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HMRC internal manual

Business Income Manual

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

There is considerable variation on the size and range of activities undertaken by rugby clubs. At the one end there is the small amateur team and at the other the premier division professional side. As explained in BIM24200 onwards, a club that exists to provide social or recreational facilities for its members is unlikely to be trading.

What may be termed the ‘professional’ game has seen increasing commercialisation over the years; the arrival of sponsorship money and the sale of television rights. The full-blown professional clubs are trading and it may be that they organise their affairs in such a manner that the trade is not a mutual trade.

As an initial step you need to consider two interrelated questions:

  • whether the club is carrying on a trade, and
  • if the club is trading, the extent to which that trade is a mutual trade.

The club may say that it is organised on a ‘not for profit’ basis. The absence of a profit-seeking motive does not preclude a finding of trading - see BIM24045.