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HMRC internal manual

Business Income Manual

Computing the amount to assess: business changes: one trade or more than one trade: companies

The case of Cannon Industries Ltd v Edwards [1965] 42TC625 is an example of where the courts held that a proper examination of all of the relevant facts was necessary before one could determine whether there is more than one trade. Having carried out such an examination the court refused to overturn the Special Commissioners’ conclusion that there was only one trade in that case.

In terms of companies, activities are only likely to amount to more than one trade if:

  • one activity is so different in nature from the other that it can be seen as quite separate; and
  • the activities are separately organised and managed right up to Board level.