BIM24485 - Meaning of trade: mutual trading and members clubs: allocation of income: nature of activities
Some of a mutual association’s dealings with its members will not amount to trading. Any income or expenses in connection with such activities are neither taxable nor allowable.
Other activities will amount to trading. Where the trading is with members and all of the conditions in BIM24020 are satisfied any profit or loss is ignored for tax purposes on the basis that it arises from a mutual trade.
From a practical point of view there may be nothing to be gained by distinguishing between an entity’s non-trading activities and its mutual trading activities - for on either basis the profits are not taxable and the losses are not allowable.
The commercial activities with non-members (or with members who fall to be treated in the same way - for example temporary members (see BIM24225); or junior/honorary members who pay for facilities on the same basis as everyone else - will gave rise to taxable profits as trading income.
You need to establish the facts in sufficient detail to distinguish the entity’s taxable and non-taxable income.