Income Tax (Earnings and Pensions) Act 2003 section 312D

Section 312B: the trading requirement

Section 312D defines what it means for a company to meet the "trading requirement" for the purposes of the qualifying bonus payment exemption under section 312B.

• A company meets the trading requirement if it is either a standalone trading company or a member of a trading group, and this must be satisfied throughout the qualifying period.
• A "trading company" is one whose activities are substantially all trading activities; a "trading group" is a group whose members' combined activities are substantially all trading activities.
• When assessing whether a company or group qualifies, all group members' activities are treated as a single business, and intra-group transactions are ignored.
• Any business carried on by a company in partnership with other persons is excluded from being treated as a trading activity for these purposes.