CA32205 - IBA: Qualifying trade: Meaning thereof

CAA01/S274

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: which are to be used in the manufacture of other goods or materials, or which are to be subjected to a process in the course of a trade, 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 on their arrival in the UK from a place outside the UK CA32224.
Agricultural contracting	Agricultural contracting CA32225 is a trade consisting in: ploughing or cultivating land occupied by another person, or carrying out any other agricultural operation on land occupied by another person, or 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.
Fishing	Fishing is a trade consisting in catching or taking fish or shellfish CA32227.
Mineral extraction	Mineral extraction is a trade consisting in working a source of mineral deposits 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.
Water undertaking	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
Transport undertaking	CA32230
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.
Tunnel undertaking
Bridge undertaking	Construction expenditure does not qualify under this heading unless it was incurred after the end of 1956-57
Highway undertaking
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.

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