BIM24850 - Mutual associations: specific activities: marketing boards

ICTA88/S509

A statutory body which:

• is concerned with marketing of agricultural products or ensuring price stability, and
• is required under a government approved scheme to pay the whole or part of its trading surplus into a reserve fund,

is allowed a deduction in computing its trading profits for the sums it pays into the reserve fund out of its trading profits provided the fund satisfies certain conditions. The conditions are set out in ICTA88/S509 (2).

Any sums withdrawn by the body from the reserve fund are to be treated as trading receipts except where they are:

• paid to a minister or government department, or
• distributed to producers, or
• refunded to persons paying any levy or duty.

Payments made to producers out of sums withdrawn from the reserve fund should be taken into account as trading receipts of the recipient.