VCM17090 - Qualifying trades: ordinary trades of distribution

Trades of wholesale and retail distribution are taken out of the exclusion of dealing in goods only if they are `ordinary'. There is a list of features to which regard must be had when deciding whether or not such trades can be classed as ordinary. In the vast majority of cases, one can recognise instantly an ordinary wholesale or retail trade of distribution without referring to the list. No method of evaluating the listed features is prescribed.

Not all the listed features will always be relevant, and the presence or absence of a particular feature will not be conclusive. Inspectors should submit any doubtful case to CT&VAT (Technical) before listing any appeal for hearing.

In addition to the list of features to have regard to, the legislation does provide that in one particular set of circumstances a trade is not an ordinary trade of wholesale or retail distribution. That is where it consists ’to a substantial extent' (see VCM17040) of dealing in goods of a kind which are either collected or held as an investment (for example, fine wines, antiques or vintage cars), and a ’substantial proportion' of the goods are held for a period which is significantly longer than the period for which a vendor would reasonably be expected to hold them while endeavouring to dispose of them at their market value. Thus if a substantial proportion of the ’investment' goods are not being actively marketed at a realistic price, the trade is disqualified even if a ‘normal' trader in that field would be holding such stock for maturity and actively marketing it.