CTM41150 - Particular bodies: trade organisations
Approval of body as a whole or of a separate fund (TECs, LECs, LEAs)
The Secretary of State for Trade and Industry is authorised to approve a body which has as its sole objective the promotion or encouragement of industrial and commercial activity or enterprise in a particular area in the UK with particular reference to encouraging the formation and development of small businesses. Alternatively where the body has this as one of its principal objectives, approval may be given in respect of a separate fund which is maintained by the body and used wholly in pursuance of this objective. The Secretary of State may make approval conditional on the provision of accounts and other information about the agency.
A body seeking approval may take various forms and it will not necessarily be called a ‘local enterprise agency’. It may be a body corporate or a trust or an unincorporated association but it must have a rule preventing it from distributing income or profits to its members or those who control it.
Approval may be withdrawn by the Secretary of State, from a date that he may specify, where the conditions of approval are not being met. Although withdrawal of approval may be made retrospectively, in practice, contributions should not be disallowed retrospectively where they have been made in good faith.
TECs & LECs information etc. ICTA88/S79A (5)
- TECs which made operating agreements with the secretary of State for Employment or, the Secretary of State for Wales;
- LECs which have made operating agreements with the Scottish Development Agency, the Highlands and Islands Development Board, Scottish Enterprise or Highlands and Islands Enterprise Business Link Organisations which have been authorised by or on behalf of the Secretary of State for Industry to use the Business Link service mark;
will be held by the Centre for Revenue Intelligence to which any necessary enquiries about the operative dates of agreements and authorisations should be addressed.
Urban regeneration companies
These are bodies involved in organising and delivering major regeneration projects in key urban locations. They require formal approval by The Office of the Deputy Prime Minister. The first such body was approved in 1999 and at May 2005 there are 22. They can take many forms but the majority are companies limited by guarantee. Most are not for profit organisations.
Taxation of LEAs, TECs, LECs & URCs
The bodies are liable to tax in the normal way, depending on the form they take, on any income from interest, rents etc, and on any trading profits should they engage in trading activities. Contributions, for which a deduction is allowed to the contributor under ICTA88/S79, ICTA88/S79A, or ICTA88/S79B should not be included as income of the body unless, very exceptionally, the contributor has stipulated that his contribution was specifically for use in the trading activity to cover revenue rather than capital expenditure of the trade.
The treatment of Government Grants should follow normal principles (see BIM40455).