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HMRC internal manual

Company Taxation Manual

Particular bodies: registered societies: carrying on trade - allowable deductions

Where a registered society is carrying on a taxable trade

  • payments in the nature of advertising expenditure, or
  • payments for the purpose of maintaining the trading operations of the society or for the direct benefit of employees or customers

are normally allowable, provided that they do not represent capital expenditure.  Payments made for the benefit of members may usually be regarded as payments for the benefit of customers.  In exceptional cases, where it appears that the members do not form the bulk of the customers, any doubt as to the admissibility of the expenditure may be referred to CTIS (Technical).

Deductions are likely to be available for the following expenditure:

  • money actually expended for educational purposes, or for fêtes and celebrations,
  • normal annual subscriptions to hospitals, convalescent homes and the like, from which the employees or members may derive benefit,
  • subscriptions to such bodies as the Royal Agricultural Society, if in the nature of payments for information or benefit received,
  • annual subscriptions to Men’s and Women’s Co-operative Guilds or to for example the International Co-operative Alliance, and expenses incurred by societies in the attendance of representatives at congresses etc, of those bodies, as distinct from contributions for any capital or political purpose.

The following are inadmissible as deductions:

  • expenditure for political purposes, such as payments to the Co-operative Party
  • payments of a capital nature to memorial and/or other endowment funds,
  • subscriptions to general relief funds or to national charitable bodies.