BIM20201 - Trade: badges of trade: the origin of the concept
Each case where the meaning of 'trade' is an issue must be decided on its own facts. The approach of the Commissioners and the courts over the years has been to examine the facts and look for the presence or absence of common features or characteristics of trade. These are the 'badges of trade' which have been identified as case law has developed before the courts.
The report of the Royal Commission on the Taxation of Profits and Income in 1955 reviewed that case law and identified six 'badges'. Since then the concept has been refined and enlarged and BIM20205 provides a summary.
A useful modern summary of the badges of trade is contained in Marson v Morton and Others  59TC381 at page 391, although the court disclaimed any intention of the review being exhaustive.