IBA: Qualifying trade: Meaning thereof
A qualifying trade is:
- a trade of the type listed in table A, or
- an undertaking carried on by way of trade listed in table B.
|Table A (qualifying trades)||Definition|
|Manufacturing or processing||Manufacturing or processing is manufacturing goods or materials CA32210, or subjecting goods or materials to a process CA32213|
|Storage||Storage is a trade consisting in storing goods or materials:|
1. which are to be used in the manufacture of other goods or materials, or 2. which are to be subjected to a process in the course of a trade, 3. which, having been manufactured or produced or subjected to a process in the course of a trade, have not yet been delivered to any purchaser, or 4. on their arrival in the UK from a place outside the UK [CA32224](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32224). | | Agricultural contracting | Agricultural contracting [CA32225 ](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32225)is a trade consisting in: 1. ploughing or cultivating land occupied by another person, or 2. carrying out any other agricultural operation on land occupied by another person, or 3. threshing the crops of another person. | | Foreign plantation | A foreign plantation is a trade consisting in working land outside the UK for the purposes of husbandry, forestry or the growing or harvesting of crops [CA32226](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32226). | | Fishing | Fishing is a trade consisting in catching or taking fish or shellfish [CA32227](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32227). | | Mineral extraction | Mineral extraction is a trade consisting in working a source of mineral deposits [CA32228](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32228). |
|Table B (undertakings which are qualifying trades)||Definition|
|Electricity undertaking||An electricity undertaking is an undertaking for the generation, transformation, conversion, transmission or distribution of electrical energy.|
|A water undertaking is an undertaking for the supply of water for public consumption.|
|Sewerage undertaking||A sewerage undertaking is an undertaking for the provision of sewerage services within the meaning of the Water Industries Act 1991|
|Inland navigation undertaking|
|Dock undertaking||A dock includes:|
* any harbour, and * any wharf, pier, jetty or other works in or at which vessels can unship merchandise or passengers,
|other than a pier or jetty primarily used for recreation CA32232.|
|Bridge undertaking||Construction expenditure does not qualify under this heading unless it was incurred after the end of 1956-57|
|Hydraulic power undertaking||A hydraulic power undertaking is an undertaking for the supply of hydraulic power.|
Professions and vocations are not trades and so they cannot be qualifying trades.
A trade does not need to be within the charge to tax to be a qualifying trade. For example, a charity may rent a building in which it makes goods to sell in its shops. The charity is exempt from tax but the manufacture of goods is still a qualifying trade and so the landlord of the building can claim IBA.