Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Business Income Manual

From
HM Revenue & Customs
Updated
, see all updates

Meaning of trade: mutual trading and members clubs: mutual associations: specific activities: bulk buying groups: introduction and layout of guidance

An entity that provides the services of a central buying organisation in order that purchases may be made for members at an advantageous rate may be regarded as trading mutually with those members provided all the other requirements for mutual trading are met - see BIM24020. In such circumstances there is a banding together to buy a product at one price from outsiders and to distribute it at another to members.

The position is different if the body acts as principal rather than merely as agent in relation to such transactions by:

  • taking title to the goods, or
  • manufacturing the product, or
  • growing the product.

The following guidance covers:

BIM24786 Bulk buying groups - basic principles
   
BIM24788 Bulk buying groups - two relationships