BIM57600 - Franchising: contents

Various forms of agreement are often described, somewhat loosely, as franchises, for example licences, dealerships and concessions. This section is particularly concerned with the tax implications of payments under `business system franchise agreements'.

The type of situation we are looking at is:

• Ferdy has established a chain of Needlework & Craft shops. He allows people to run shops using his brand and system. These are franchises. Ferdy is a Franchiser.
• Ferdy has given John the franchise to operate one of these shops. John is a franchisee.

This section contains the following:

The guidance on know how allowance for franchisees is at CA70000 onwards.

Intangible assets regime for companies

For companies acquiring or selling franchises after 31 March 2002, a different tax regime to that described here is likely to apply. This is the intangible assets regime for companies, and it is introduced at BIM35501, and covered more fully in the CIRD manual. If the intangible assets regime applies then it takes precedence over the guidance here.