CTM41215 - Particular bodies: trade associations: arrangement procedure
Explain the arrangement to any trade association that asks about it. Send any applications to CTIS (Technical) with copies of:
- the latest version of the association’s constitution and rules,
- the latest accounts, and
- a list of its current members.
No allowance can be made for amounts that have been spent on anything of a political nature even if it is one of the aims of the association. Expenditure on indirect internal taxes is dealt with at BIM46455.
CTA09/S1298, covered in BIM45000 onwards, applies to calculating the entertainment expenses of any association that has adopted the arrangement. Normally only certain expenses are allowed. These are for entertaining:
- staff of the association, but when staff entertainment is incidental to entertainment of customers its cost is disallowed, or
- representatives of the members if the costs of the members themselves would be allowed under CTA09/S1298.
Profits that are otherwise liable are excluded from the arrangement. This includes any sums chargeable to CT as trading, property or investment income and chargeable gains. An association that has adopted the arrangement may, if its expenditure is greater than its income, claim relief in the same way as a company may claim for trading losses. That is, the deficiency is treated as if it were a loss in trade available for set-off under CTA09/S37 (see CTM04500 onwards) against other profits. If there is a balance of deficiency that cannot be allowed accordingly, the association may carry it forward under CTA09/S45. See paragraph 7 of the arrangement.
For the purpose of group relief under CTA10/PART5 (see CTM80100 onwards), any deficiency of the association which may be claimed under the arrangements as if it were a trading loss under CTA10/S37 is available for group relief. Similarly, the surplus of an association that has adopted the arrangement should be regarded as part of its total profits against which group relief may be set off.
Refer any disagreement about assessments for associations which have adopted the arrangement to CTIS (Technical) before the appeal procedure under the arrangement is invoked or if tax due is not paid.